Preamble

The House met at half-past Two o'clock

PRAYERS

[Mr. SPEAKER in the Chair]

Oral Answers to Questions — MINISTRY OF DEFENCE

T.A. Volunteer Reserve III

Mr. James Allason: asked the Secretary of State for Defence whether he will improve the equipment and training periods for the Territorial Army Volunteer Reserve III in order to meet the tasks of the force.

The Under-Secretary of State for the Army (Mr. James Boyden): The equipment and the training planned are appropriate to its rôles.

Mr. Allason: Does the hon. Gentleman think that 27 out-of-camp evening training periods and four day-training periods are adequate for training in what we hope will be this wonderful force? Will he not give encouragement by providing good equipment and decent training to those who are so enthusiastic as to join the force?

Mr. Boyden: This is appropriate to the new rôle.

N.A.T.O.

Mr. Kershaw: asked the Secretary of State for Defence what proposals he has made to the North Atlantic Treaty Organisation Council to alter the forward defence strategy of the North Atlantic Treaty Organisation.

The Secretary of State for Defence (Mr. Denis Healey): None, Sir.

Mr. Kershaw: Does not the Secretary of State realise that if he intends to reduce the number of troops much more than at present this means a trip-wire strategy, meaning nuclear war or nothing

in Europe? Does he think this is sensible? Why has he changed his mind so much from when he was in opposition?

Mr. Healey: The hon. Member is wrong on all three points. There has never been any question that N.A.T.O. would be able to defend Western Europe purely with conventional weapons against all the forces which the Soviet Union could launch against it. The question is: what is the best balance of risk compatible with the military needs, the political intentions of a possible aggressor, and the economic resources of the Western side?

Mr. Powell: Will not the Secretary of State realise in time that by pressing, against the advice and views of all his allies, for a reduction in the assumed length of a conventional conflict in Europe, he is virtually committing this country to instantaneous nuclear reaction?

Mr. Healey: That remark is characteristic of the right hon. Gentleman in its extravagance and irrelevance.

Hon. Members: Answer.

Mr. Sandys: Will the right hon. Gentleman confirm that he recognises that we have a treaty obligation not to reduce our forces without the approval of our partners in Western European Union, not merely after consultation with them?

Mr. Healey: Yes; I certainly recognise that, as did the previous Government when they reduced their commitment from 80,000 to 58,000.

Far East Forces (Reductions)

Rear-Admiral Morgan Giles: asked the Secretary of State for Defence what total reductions of forces in the Far East are planned by 5th April, 1967, and by 5th April, 1968.

Mr. Healey: At the moment I have firm plans for bringing home at least 10,000 men, most of whom will have returned to this country by 5th April, 1967. I cannot yet give a similar firm forecast for April, 1968.

Rear-Admiral Morgan Giles: Were the right hon. Gentleman's plans for this year's reductions agreed beforehand with the Australian Government?

Mr. Healey: Yes. As the hon. and gallant Gentleman will know, the then Foreign Secretary and I explained our plans in great detail to the Australian Government almost exactly one year ago.

Mr. Barnett: Will the plans reduce by 1970 the total of £2,000 million at 1964 prices as set out in the Defence Review of 1966?

Mr. Healey: These plans were calculated in relation to the Defence Review target of £2,000 million at 1964 prices for the financial year 1969–70.

Sir A. V. Harvey: How is the 10,000 allocated among the three Services? How does the figure of 10,000 out of the total of about 60,000 square up with the Prime Minister's statement that massive withdrawals would take place?

Mr. Healey: I made it clear that this is not the end of the road, but these first 10,000 are primarily teeth arms and immediately supporting units of the Army, although some naval and air forces are also involved.

Mr. Frank Allaun: How are the remaining men to be employed—in playing bingo? Would it not be better to bring them home and employ them usefully in British industry?

Mr. Healey: I do not know whether my hon. Friend thinks that they should be producing bingo machines. All these men who are in the Far East at present are usefully employed in supporting the foreign policy and the defence policy of Her Majesty's Government, but I expect to be able to reduce their number further over the coming year.

Mr. Powell: Is the Secretary of State seriously suggesting—or is he still in this absurd, hilarious mood—that the next tasks for British industry under his Administration are the making of bingo machines?

Mr. Healey: If the right hon. Gentleman seriously thinks that I was suggesting that, he should think a little harder next time.

Simonstown Agreement

Rear-Admiral Morgan Giles: asked the Secretary of State for Defence what changes are planned in the working of the Simonstown Agreement.

Mr. Healey: We envisage no changes in the terms of the Simonstown Agreement, but discussions are being held on certain aspects in the light of the projected withdrawal of the Commander in Chief, South Atlantic and South America station.

Rear-Admiral Morgan Giles: Will the Secretary of State say on what date it is intended to withdraw the British Naval Commander-in-Chief?

Mr. Healey: No, I cannot say that now. All these matters, as the hon. and gallant Gentleman knows, are being discussed at the present time with the South African Government, and a British mission is leaving on Friday to carry the discussion further.

Mr. Wingfield Digby: Is not the right hon. Gentleman in danger of sacrificing the long-term defence needs of this country because of a temporary embarrassment with the South African Government?

Mr. Healey: I do not think so at all.

Mr. Paget: Would my right hon. Friend tell us how far is our next nearest base to Simonstown?

Mr. Healey: Not without notice, Sir. I can tell my hon. and learned Friend that we do not anticipate having to carry out tasks in that part of the world for which we will need facilities which we expect to withdraw from that part of the world.

Overseas Expenditure

Mr. Powell: asked the Secretary of State for Defence what reduction in overseas expenditure in 1967–68 compared with 1966–67 he estimates will result from the withdrawals from Cyprus announced on 30th November.

Mr. Healey: I hope to include in the Statement on the Defence Estimates information about the overseas foreign exchange costs of our forces.

Mr. Powell: When are we to be told the details of the plan which we were told had been worked out in detail last July for a reduction in next year's Estimates of —80 million in overseas defence costs?

Mr. Healey: In the first place, the House was never told anything in precisely those terms, but I will, of course, give the House the fullest information possible of the plans for the defence contribution to the saving of £100 million in Government overseas expenditure during the coming year when the White Paper is published in a few weeks' time.

Mr. Frank Allaun: asked the Secretary of State for Defence how he proposes to save the promised £80 million a year in overseas military expenditure.

Mr. Dickens: asked the Secretary of State for Defence if he will state the progress achieved in effecting the reduction of £80 million per annum in overseas defence spending promised by the Government.

Mr. Healey: I expect to be able to give further information in next month's Defence White Paper.

Mr. Allaun: But was not that promise made six months ago? Is it to be kept—may we have an assurance on that—or is only a negligible fraction of our military overseas expenditure of £605 million a year to be saved?

Mr. Healey: I am not sure whether I should say "Yes" or "No". The fact is that the Government committed themselves to make savings during the next financial year at the rate of £100 million a year, and defence will carry by far the major part of those savings. I can assure my hon. Friend that we shall give such details of the way in which these savings will be secured as we are able to give in next month's Defence White Paper.

Mr. Dickens: Is my right hon. Friend aware that many of us on these benches regard this cut as the absolute minimum that we can accept in the forthcoming financial year? Will he use his very best endeavours to insist that the Government's defence policy is kept broadly in line with the official policy of the party which he supports?

Mr. Healey: It has been my constant endeavour for the last two and a half years to bring our defence expenditure into line with our resources. I am fortified by the knowledge that I have the support of many of my hon. Friends in doing so.

Mr. Hastings: Would not the right hon. Gentleman agree that considerable technical advantage accrues to industry as a whole from expenditure on defence equipment?

Mr. Healey: I certainly do, and I think that that is a consideration to be borne in mind, although I think that many of us would feel that often these advantages could be gained at very much lower cost if we attempted to secure them directly by investment in civil research and development projects.

Land

Mr. Kershaw: asked the Secretary of State for Defence what proposals he has to acquire additional land for training purposes.

The Minister of Defence (Administration) (Mr. G. W. Reynolds): None, Sir.

Mr. Kershaw: Does the Minister of State recall saying about two years ago that this was a desperately urgent problem; that it was due to the political cowardice of the Tories that it had not been solved before? Does he realise that we have less training ground now than we had under the Tory Administration? Would he now care to choose a word to describe his own conduct in relation to this important matter?

Mr. Reynolds: The hon. Gentleman seems to be unaware of the fact—although I thought that he knew it—that there has been a major reorganisation of the Territorial Army since then, and the spare training land arising because of that reorganisation will satisfy, at least for the time being, the demands of the Regular Army.

Mr. Gwilym Roberts:: Is the Minister aware that this Answer will be warmly welcomed on this side of the House? We appreciate the great need for land for building purposes and land used for training is almost entirely waste.

Mr. Reynolds: I cannot agree that land used in this way is almost entirely a waste, because about two-thirds of the land owned and used by the Services is let for agricultural purposes in some way or other, and during the past two years we have surrendered a large area of land to the Greater London Council and other


authorities in the London area for home building.

Mr. Atkins: Is the Minister satisfied that we have enough training land to meet the requirements of the Armed Forces in this country?

Mr. Reynolds: At the present time, yes.

Mr. Shinwell: Can my hon. Friend tell us about the German and Italian forces training in Wales and occupying useful land?

Mr. Reynolds: To an extent, this is on a reciprocal basis. We have large training areas in Germany.

Shipyards (Naval Orders)

Mr. Edward M. Taylor: asked the Secretary of State for Defence what was the value of order for new naval vessels placed by Her Majesty's Government with British shipyards in the years 1965 and 1966, respectively; and what are the comparable figures for Scottish shipyards only.

The Minister of Defence (Equipment) (Mr. Roy Mason): For British shipyards, £42 million and £48 million respectively; for Scottish yards only, £14 million and £6 million, respectively.

Mr. Taylor: Are not these figures very disappointing, bearing in mind the fact that for ten years after the war about half of all new naval vessels were built in Scotland. Is not this another Government example of neglecting Scottish interests?

Mr. Mason: No. It is because of the changing demands of the Royal Navy and the fact that the nuclear shipbuilding programme represents much of that, and none of these orders is in Scotland at the moment.

Sir Knox Cunningham: Will the right hon. Gentleman bear in mind the capacity of Harland and Wolff in Belfast and consider the placing of orders with them?

Mr. Mason: Yes, if they are competitive with the rest of the yards.

Dependants and Civilian Staff (Foreign Exchange Costs)

Mr. Hooley: asked the Secretary of State for Defence whether he will give an estimate of the total number of civilian

dependants of the Armed Forces and civilian staff attached to the Armed Forces at present living abroad, and the approximate cost in foreign exchange to this country of their expenditure.

Mr. Reynolds: About 168,000. It is the individual Service man who finances most of his dependant's expenditure; I cannot say how much foreign exchange he would save if they were not abroad with him.

Mr. Hooley: Would my right hon. Friend agree that it is of the utmost importance that the foreign currency expenditure of this civilian staff attached to the forces should be brought drastically under control in view of the severe strain on our foreign exchange which it represents?

Mr. Reynolds: I would not limit this control solely to the area about which my hon. Friend has asked the Question. A figure of £120 million is drawn by way of pay by the Service men themselves. Any estimate which I tried to make of how much of that they would not draw overseas if their families were not with them would be, at best, a poor guess.

Mr. Powell: Is the estimate of any additional overseas expenditure under this head, other than Forces' pay, included in the estimates of overseas defence expenditure?

Mr. Reynolds: We know, of course, the total amount of overseas defence expenditure in foreign countries of which such things as schools, married quarters and things of that nature form a part, but it is not possible, without a large amount of work, to separate these contingent items right down with any degree of accuracy.

Persian Gulf (Commitments)

Mr. Hooley: asked the Secretary of State for Defence how many troops the Government intend to maintain in Kuwait and Bahrein up to 1970 to fulfil the commitments laid down in the Defence White Paper; and what is the estimated cost in each financial year from 1967–68 to 1970–71.

Mr. Dickens: asked the Secretary of State for Defence if he will make a statement on the future size and cost of British forces in the Persian Gulf.

Mr. Healey: I would refer to my replies to the hon. Member for Hampstead (Mr. Whitaker) on 10th November, and to the hon. Member for Liverpool, Walton (Mr. Heffer) on 14th December, 1966.

Mr. Hooley: Would the Minister care to explain what is the point of the policy of dismantling expensive and long standing military installations in Southern Arabia in order to build up installations in the Persian Gulf?

Mr. Healey: I can explain that very well to my hon. Friend. The point is to ensure the continued stability of the Gulf until countries in the area are capable of maintaining stability on their own. We do not regard a base in Aden as being necessary for that purpose. But consequent on leaving Aden, we feel it necessary to make a small increase in our forces in the Persian Gulf to maintain our obligations.

Mr. Dickens: Is the right hon. Gentleman aware that the official policy of the Labour Party is how to secure the withdrawal from the Persian Gulf, from Malaysia and Singapore, of all British forces by 1970? Would he bear this in mind in his forward planning in the Persian Gulf and generally east of Suez?

Mr. Healey: I will certainly bear all relevant considerations in mind at all times.

Mr. Stratton Mills: What report has the right hon. Gentleman received from Her Majesty's representatives in the Gulf about the reaction to the British withdrawal from Aden?

Mr. Healey: I cay say that Her Majesty's representatives in the Gulf report the local Governments as being very satisfied with the steps which are proposed and to which I have just referred.

Sir Ian Orr-Ewing: Does the right hon. Gentleman know that there are strong rumours that there is escalation of costs in the increase of numbers and facilities in the Persion Gulf? Would it not be wiser to restrict service in this area to unaccompanied service of short duration and not to build a complicated support mechanism in an area which is totally unsuitable for women and children.

Mr. Healey: I can assure the hon. Member that we have no intention of

building married quarters in those parts of the Gulf where we are developing substantial new facilities. I do not know what reports he has heard, but I can also tell him that there is no indication of escalation in the cost of the building programme.

Mr. Sandys: Did I understand the right hon. Gentleman to say that he did not consider that a British military presence in South Arabia was necessary for the stability of that area? Does he not realise that by withdrawing prematurely we are going to leave a power vacuum in that area which can only result in invasion or subversion organised by Egypt?

Mr. Healey: The House will be aware that we have debated this matter on many occasions, and we will no doubt debate it again in a few weeks' time. I referred to the stability of the Gulf, and I said that a base in Aden was not necessary in order to maintain our obligations to the States in the Gulf.

Mr. Heffer: Will the right hon. Gentleman take into consideration the fact that our presence in these areas may be a provocation and that it means the opposite to what he suggested in his reply? Would he not think again about this matter; otherwise we may be there for ever?

Mr. Healey: I am grateful to my hon. Friend for making a point which is of great weight. The great question which the Government have to ask themselves continually is whether the presence of British forces in a given area is likely to contribute to the stability or is likely to derogate from the stability of the area. I am quite satisfied that the presence of British forces in the Gulf is a contribution towards stability.

Anglo-French Variable Geometry Aircraft

Mr. Goodhew: asked the Secretary of State for Defence whether he has now reached agreement with the French Government on the joint production of a variable geometry strike aircraft.

Mr. Marten: asked the Secretary of State for Defence if he will make a statement about the Anglo-French swing-wing aircraft.

Mr. Wingfield Digby: asked the Secretary of State for Defence whether


he will now make a further statement about the future of the Anglo-French swing-wing aircraft.

Mr. Wall: asked the Secretary of State for Defence if he will make a statement on the future of the Anglo-French variable-geometry aircraft.

Mr. Healey: When my hon. Friend the Minister of Aviation and I met M. Messmer the French Minister for the Armed Forces on 16th January, we agreed that the Anglo-French variable geometry project should go ahead. We decided to meet again in March to complete agreement on the technical specification and to take the further decisions required to implement the programme.

Mr. Goodhew: Can the right hon. Gentleman assure the House that this new aircraft will satisfy the needs of the Royal Air Force with its range, speed, weapon load and contour hugging? Can he say whether there is a break clause in this agreement?

Mr. Healey: The Air Staff is fully satisfied with the performance characteristics as so far defined for the aircraft, although we shall be consulting potential purchasers over the next few weeks to see whether any adjustments to these specifications are likely to attract a larger market. There is a break clause in the agreement because both the French Government and ourselves believe that it would be a great mistake to commit ourselves to a programme of this size without any right to review it at any stage later on.

Mr. Marten: Is the Royal Air Force getting these planes earlier than originally expected? If so, what is the cost of that early delivery? What is the cost of each plane calculated to be, and does that calculation include an allowance for escalation of costs?

Mr. Healey: The R.A.F. is planning to take delivery of these aircraft under this programme in 1974 or thereabouts, the time always envisaged over the last two years, although the French Government will be taking delivery of its version of the aircraft a little later than it originally intended. I do not think that I can give the House the current estimates of unit costs for the aircraft, but I can assure the hon. Gentleman that the

French Government and ourselves have probed the cost estimates more carefully than the cost estimates of any previous aircraft project have been probed at this stage of development, and we have added a margin for contingency.

Mr. Digby: Will the right hon. Gentleman in due course give the House full details of what has been agreed—if not now, then by March? Will he say what order will be placed by the British Government and to what cancellations of other types of aircraft it is likely to lead?

Mr. Healey: I will, of course, follow the practice established by the present Government of giving far more details of cost and numbers of aircraft than were ever given in the past, and I will communicate such details as I feel to be appropriate to the House from time to time.

Mr. Wall: Will the right hon. Gentleman consider giving a clear definition of the capabilities of this aircraft? Is it not a fact that we expect to use it as a strike aircraft and that the French intend to use it as a fighter aircraft? Is it not supposed to do rather too much? How much will be allotted in the way of finance in the coming financial year?

Mr. Healey: As the hon. Gentleman will know, the great advantage of variable geometry is that great flexibility of rôle is conferred on the aircraft. The House must recognise, as I have said on many occasions, that the old idea that an aircraft can be built for a single role is now completely out of date. We require the aircraft primarily in the strike role, although we shall also use it for reconnaissance and to some extent for interception. The French require it primarily for interception, but at this stage we have succeeded in reconciling our requirements so far as is necessary. I cannot without notice give details of cost in the coming year, but it will be very small because we do not expect to authorise production of the prototype until the year is at an end.

Mr. Rankin: Will the methods employed in building this aircraft be modelled on those employed in building Concord?

Mr. Healey: I am not quite sure of the implications of that question, but what


I can tell my hon. Friend is that we shall use the most up-to-date methods with the best chance of producing the aircraft as fast as possible at the minimum cost.

Mr. Powell: Is there to be a joint statement from the two Governments upon what has been agreed? What is the division of cost between the two countries in respect of research and development?

Mr. Healey: A joint statement was issued by the two Governments on Monday afternoon and was published in yesterday's Press. Agreement was reached on Monday and the communiqué was published. Development costs will be shared equally between the two countries, and it is expected that the two countries will take roughly the same number of aircraft and production costs will be shared in proportion to the number ordered by each country.

Mr. Robert Howarth: Is my right hon. Friend aware that there is widespread satisfaction at the announcement of this agreement? Is he aware that the absence of congratulations from hon. Members opposite is rather significant? Will he ensure that this project, which is so important to the British and French aircraft industries, is pursued with the utmost vigour?

Mr. Healey: I am grateful to my hon. Friend. I do not want to make any party points on this matter. I hope that both sides of the House will agree that this agreement lays the basis for the long-term future of the British and the French aircraft industries in cooperation with one another. I hope that, whatever disagreements we might have had about this matter in the past, we can now agree that the industry has a stable programme of military aircraft carrying it through the 'seventies and that both the industry and the Government have an equal responsibility from this stage on to see that nothing occurs which brings new instability to the programme.

Mr. R. Carr: Can the right hon. Gentleman tell the House something about the arrangements for the avionic equipment for the A.F.V.G.? Which

country is to take the lead on that? Secondly, as we understand that the helicopter agreement is tied up with the A.F.V.G. agreement, can he say anything about the effects of that on the British helicopter industry, and, in particular, can he assure the House that quick administrative decisions will be taken about the British helicopter WG13?

Mr. Healey: The details of the requirements for the avionics of the aircraft have not yet been finalised between the two Governments, but we have agreed on the very important general principle that both research and development and production work should balance out across the programme as a whole. I can tell the right hon. Gentleman that the helicopter package is in no way dependent on the first. The helicopter package stands on its own feet as an agreement for the joint production of three aircraft which both countries need, balanced in such a way as to ensure that they both get a fair share of the development and production work in relation to their orders.

Contract Cancellations (Compensation)

Mr. Goodhew: asked the Secretary of State for Defence how much has been paid in compensation for cancelled military contracts from October 1964 to the present time.

Mr. Mason: Something less than £3 million has been paid in compensation for unavoidable terminal costs due to cancellations. In addition, full payment has been or is being made for equipment delivered or in course of manufacture, and materials and equipment obtained for the purposes of the contracts prior to cancellation.

Mr. Goodhew: Why was the right hon. Gentleman so coy about giving this information to his hon. Friend the Member for Blaydon (Mr. Woof) last November? Can he tell us whether these cancellation charges are included in the costs which are now to be given for aircraft to replace those cancelled?

Mr. Mason: No, the £3 million is an addition.

Defence Policy (Major Operations)

Mr. Mayhew: asked the Secretary of State for Defence, to what extent the defence policy of Her Majesty's Government now envisages major operations of war east of Suez in the 1970s otherwise than on the authority of the United Nations.

Mr. Gwilym Roberts: asked the Secretary of State for Defence to what extent Her Majesty's Government's defence policy in the 1970s envisages any major war operations other than on the authority of the United Nations.

Mr. Healey: We cannot exclude the possibility that such operations may take place. Our policy would, of course, be governed by the first of the three "general limitations" set out in paragraph 19 of "The Defence Review"; and our ability to participate might well be affected by the other two.

Mr. Mayhew: Does not my right hon. Friend agree that the idea of our military intervention on the mainland of Asia, outside the United Nations, with dwindling resources, is becoming an increasingly doubtful and dangerous proposition? Is he also aware that this insistence on a world military rôle is increasingly making nonsense of the Government's policy in Europe?

Mr. Healey: As always, I have some sympathy with the points raised by my hon. Friend, but, as always, he fails to balance the good points that he has to make with other considerations which he ignores. I do not think that the majority of Members on either side of the House would wish the Government, in advance and without knowing the circumstances, to renounce all future capability for making a contribution to the peace in the part of the world which we all agree is likely to be the main source of international instability over the next ten years.

Mr. Roberts: Would my right hon. Friends agree that it would be a very major contribution to world peace if this Government categorically said that they would undertake major military operations only on the authority of the United

Nations? Would he further agree that it would be an even greater contribution if we could get our American allies to do the same?

Mr. Healey: With respect to my hon. Friend, to make such a pledge, and even more to carry it out, would be to tell countries which are capable under the United Nations Charter of preventing the United Nations from taking action, if there is a threat to peace, that they were perfectly free to go ahead and use their military forces as they wished to commit aggression.

Rear-Admiral Morgan Giles: Will the Secretary of State try to make clear to his hon. Friend the Member for Woolwich, East (Mr. Mayhew) that in his close discussions with the Australians, to which he referred a moment ago, he did take the point that they have made so strongly, that the States in South-East Asia need the assurance of strong friends to enable their economic and constitutional systems to evolve in a way we all hope to see?

Mr. Healey: I did indicate that general line of policy when I was in Australia, and I think my hon. Friend is well aware of that.

Asia (Commitments)

Mr. Mayhew: asked the Secretary of State for Defence what consultations he has had with the United States Government regarding the fulfilment of Great Britain's defence commitments in Asia in the 1970s.

Mr. Healey: None on this specific question. We do, however, keep in touch with the United States and our other allies generally about future defence policy.

Mr. Mayhew: In his previous answer, my right hon. Friend acknowledged that we cannot carry out these commitments, except in association with the Americans. What has been done to get joint intelligence, joint contingency planning and so on, and at what level is this taking place, or is nothing being done at all?

Mr. Healey: With great respect, my hon. Friend should remember that we already have an arrangement, and have had for a long time, to interchange intelligence with the United States on many


parts of the world. Equally he must be aware, because we have proved this capacity, that there are many situations outside Europe where it is possible for us to play an invaluable rôle in protecting the peace and stability not in co-operation with the Americans. We have just concluded successfully, in co-operation with our Commonwealth allies, a three-year campaign of this nature in Malaysia.

Mr. Onslow: Arising out of the Minister's consultations with the United States Government, does the right hon. Gentleman think that there is likely to be a significant increase in the British involvement in Thailand?

Mr. Healey: No, Sir.

United Nations Peacekeeping Force

Mr. Judd: asked the Secretary of State for Defence whether plans have been made for British participation in possible United Nations peace-keeping arrangements east of Suez, particularly after 1970.

Mr. Healey: I would refer the hon. Member to the reply given by my hon. Friend the then Minister of State for Foreign Affairs to the hon. Member for Hampstead (Mr. Whitaker) on 17th June last [Vol. 729, c. 353–4.], which sets out the Government's policy on the creation of a permanent United Nations Peacekeeping Force, and what we are already doing or stand ready to do to assist peacekeeping activities of the United Nations. This statement applies as much to the area east of Suez as to any other part of the world.

Mr. Judd: Would my right hon. Friend agree that if we are serious about rationalising our overseas commitments, particularly east of Suez, we must give a great deal more dynamic thought now to how international and collective agreements can specifically operate in that area under the United Nations?

Mr. Healey: I would agree in principle with my hon. Friend, although I hope that his suplementary question did not imply that the Government are not giving a great deal of dynamic thought to this question. I would say, and I know that my hon. Friend will agree, that the Government's support for the United Nations decision to send a mission to Aden in

the near future may, and I hope will, lead to the United Nations accepting some responsibility for the security of that part of the world when British forces are withdrawn.

Local Populations (Social Services)

Mr. Judd: asked the Secretary of State for Defence what is the annual cost of regular social, medical and educational services to the local populations, other than those connected with military action, provided by British Armed Services east of Suez.

Mr. Reynolds: The Armed Forces do not provide regular services of this kind to local populations, except at Gan, where the cost is £5,000 a year.

Mr. Judd: Would my hon. Friend agree that in many ways this work is more important and more valuable than military operations undertaken by forces and contributes more to security? Does he not further agree that it could be more effectively undertaken with a civil programme in the area which could be assisted rapidly if we were to reduce our military commitment?

Mr. Reynolds: My hon. Friend asked for regular services and the answer I gave is the only regular service. A lot of work of this nature is done in connection with military operations. This was done in Borneo and is being done in South Arabia, but basically it is not a matter for a charge upon the Defence Vote to carry out this kind of work but on the Vote of the Department dealing with that kind of thing.

Germany (Costs)

Mr. Julius Silverman: asked the Secretary of State for Defence what has been the total cost to the British Government of British military forces in the German Federal Republic and in West Berlin since 1955; and what has been the cost over the same period in foreign currency.

Mr. Healey: For the period from 1st April, 1958, the respective figures are £975 million, excluding the cost of unit equipment, and £575 million. I regret that comparable figures for earlier years are not available.

Mr. Silverman: Does not my right hon. Friend agree that the accumulated effect of this expenditure is to impose an intolerable burden upon our economy and upon our foreign exchange reserves? Will the Government see that this expenditure is either brought to an end or drastically reduced in the very near future?

Mr. Healey: My hon. Friend will be well aware that the Government consider a continuation of a burden on this scale as being intolerable and have made clear when they propose to take decisions on this matter. I would point out to the House that as against this, the German Government paid something like £300 million to offset our costs over the period to which I referred, and the net cost to this country over the whole period, without deducting German offset, was less than half our expenditure on an average year of the last world war. Expenditure which is necessary to prevent the occurrence of a third world war is fully justified on these grounds.

Sir C. Osborne: Does the Minister really think that the present Soviet Government will ever attack Western Europe; if not, why does he not bring those troops home at once?

Mr. Healey: One of the things which many of us on both sides have learned over the years is that to use the word "never" on a matter of this nature is very unwise indeed.

Mr. Michael Foot: Will my right hon. Friend say when the Government intend to take this decision? When do they propose to carry out the undertaking which the Prime Minister gave to the House on 30th July last year?

Mr. Healey: My hon. Friend will recall that my right hon. Friend the Chancellor of the Duchy of Lancaster made clear in December that the Government have undertaken not to take any decision leading to a change in the force levels it currently maintains in Germany until 1st July so as to give a chance for the current multilateral discussions in N.A.T.O. and the tripartite talks between the British, German and United States Governments to reach agreed conclusions.

Mr. Powell: Will the right hon. Gentleman make it clear, in view of some of the things that have been said, that the

security of Western Europe is a supreme interest to this country, and that it can only be guaranteed if there is firm evidence of this country's determination to participate in its defence?

Mr. Healey: Yes, I am glad to agree with the right hon. Gentleman completely. I hope that our views in this regard will be made very clear in the forthcoming Statement on the Defence Estimates.

Service Families (Housing)

Mr. Fisher: asked the Secretary of State for Defence whether he will now announce his proposals for the housing of service families returning to this country from Aden next summer.

Dame Joan Vickers: asked the Secretary of State for Defence in view of the general housing shortage, what arrangements he is making to ensure that families returning from Aden and Singapore have adequate housing accommodation.

Mr. Reynolds: We have been preparing our plans for the accommodation of these families for some time. In the longer term we aim to provide good permanent accommodation for all families who wish it within reasonable distance of the husband's station. We are building more married quarters, and we are buying or renting suitable houses to bridge the gap between the current needs and the completion of the building programme. If there are still not enough houses for all the families who need them immediately, we shall find other temporary accommodation for them.

Mr. Fisher: In the short term, however, is it not true that many of these families may have to be housed in hostels and caravans and, if so, for how long?

Mr. Reynolds: I do not say that this will not occur, but I would dispute the word "many" in the hon. Gentleman's supplementary question.

Dame Joan Vickers: Is the hon. Gentleman getting in touch with the local authorities to see if they could build some of these houses? Is he aware that I very much dislike, as I remember the hon. Gentleman does, the cantonment of Service families, and I hope that they will be brought into the general population?

Mr. Reynolds: Management problems become more difficult if they are


scattered too much. But I take the hon. Lady's point. Quite a large number of the properties we are buying will be on housing estates at present being built by speculative builders. Therefore, the Service people will be in with the normal population of an area, with perhaps 20, 30 or 40 in one place.

Mr. Hooley: Has my right hon. Friend's Department considered using industrialised building methods to provide this kind of housing?

Mr. Reynolds: I can assure my hon. Friend that all three Services give a lead in industrialised building. The proportion of permanent married quarters being built by industrialised methods is probably greater than the building programme of any local authority in this country.

Defence Expenditure

Mr. Molloy: asked the Secretary of State for Defence what percentage of the gross national product Her Majesty's Government now propose to spend on defence.

Mr. Healey: A forecast of expenditure for 1967–68 will appear as usual in the 1967 Statement on the Defence Estimates. For later years an estimate cannot be given, as explained in my reply to my hon. Friend the Member for Heywood and Royton (Mr. Barnett) on 9th November last.

Mr. Molloy: Referring to the figure and the report which my right hon. Friend mentioned, would not he acknowledge that the ramifications of the figure, particularly in materials, manpower, energy and endeavour, can only have a crippling effect on the efforts being made by working people to restore the economy of our nation and that there must be a very serious look at what is involved, notwithstanding the fact that we have certain international commitments? Unless this is done, the probability is that we shall end up in a disastrous situation on the economic and defence fronts.

Mr. Healey: Of course, the Government are aware of the economic implications of defence expenditure. That is why last year it took a decision which saved the country £400 million on the

defence budget planned by the previous Government.

Mr. Powell: When will the right hon. Gentleman at last abandon the pretence that the gross national product in 1969–70 is likely to be anything approaching the figure on which he based his Defence Review last year?

Mr. Healey: As the right hon. Gentleman knows, that is not a question for my Department.

Fleet Air Arm

Mr. Wall: asked the Secretary of State for Defence if he will make a statement on the future of the Fleet Air Arm.

Mr. Hamling: asked the Secretary of State for Defence whether he will now make a further statement on the future of the Fleet Air Arm.

Mr. Healey: I have nothing to add to the statement in Part I of the Statement on the Defence Estimates 1966.

Mr. Wall: Since the Government have ordered the destruction of the Fleet Air Arm by the mid-1970s without giving the Royal Navy any alternative form of strike capability will he consider the provision of far less sophisticated aircraft carriers operating vertical take-off aircraft in the strike rôle for which helicopters are not acceptable?

Mr. Healey: We are looking at every possible way in which to meet the needs of the Forces, including the needs of the Royal Navy for support in the strike rôle, but I ask the hon. Gentleman—I know that he has the interests of the Navy and the Fleet Air Arm very much at heart—to recognise that at least half the Fleet Air Arm is concerned with flying helicopters and that the Government have already—the agreement which we reached on Monday contributes to this—developed a plan for the greater use of helicopters in the service of the Fleet.

Mr. Hamling: Has my right hon. Friend any plans for using small carriers?

Mr. Healey: All these matters are under discussion.

Mr. Powell: Have not the right hon. Gentleman's replies disclosed that he deprived the Royal Navy of one form of


armament before he had decided what form of armament it should have instead?

Mr. Healey: No. What my answers reveal is that this Government, unlike their predecessor, took care to take a decision on the replacement of the aircraft carrier force in time to meet the needs for replacing the capability when carriers had gone. We did not delay a decision year after year as the previous Government did in the hope that a future Government would grasp this nettle.

Mediterranean and East of Suez

Mr. Wyatt: asked the Secretary of State for Defence what action has so far been taken to reduce the cost of maintaining bases and forces in the Mediterranean area, and east of Suez.

Mr. Barnett: asked the Secretary of State for Defence how his plans for savings on the foreign exchange costs of Great Britain's defence commitments east of Suez are progressing; if he will estimate the foreign exchange costs in each of the years to 1970; and if he will make a statement.

Mr. Healey: I would ask my hon. Friends to await next month's publication of the Statement on the Defence Estimates.

Mr. Wyatt: As a former employee of Transport House, is not my right hon. Friend aware of the gravity of going against a conference decision which clearly instructed him promptly to get on with reducing the cost of our bases east of Suez and to make plans to withdraw them by 1970? Is he aware that he is the biggest single drain on our balance of payments and is the prime cause of our economic difficulties? Will he now try to reform himself?

Mr. Healey: On the first question, I learnt a good deal when I was at Transport House, and I have learnt a good deal by observing the fortunes of my hon. Friend as a result of his blind subservience to the decisions of party conferences. On the second question, total Government expenditure for all purposes overseas, including civil as well as defence purposes. represents only 8 per cent. of our total import bill. To regard that as the prime contributor to our economic problems shows a lack of balance.

Mr. Barnett: Would my right hon. Friend say how his present plans differ from the 1966 Defence Review and how they differ from the statement of the Prime Minister on 20th July? Would he confirm that the cuts which he referred to in answer to questions by some of my hon. Friends do not affect the Estimates set out in the 1966 Defence Review?

Mr. Healey: The big difference between the decisions envisaged and reported to the House in last year's White Paper and some of the decisions which I have indicated to the House on recent occasions is that, because of the balance of payments crisis last July, the Government decided to accelerate many of the redeployments which they envisaged by up to two years compared with the 1969–70 target. That means that the country will be benefiting in its foreign exchange by decisions taken since the Defence Review to a very large degree.

Malaysia, Singapore and Persian Gulf

Mr. Frank Allaun: asked the Secretary of State for Defence what saving would be obtained, current and long term, by withdrawal of British forces from Malaysia, Singapore and the Persian Gulf by 1969–70.

Mr. Healey: So much would depend on the manner in which the withdrawal was effected that it is not possible to provide useful illustrative figures.

Mr. Allaun: As the Ministry's own figures show that the cost is £235 million a year, and since confrontation has ended, why does not my right hon. Friend bring all the troops home from Malaysia? Is it because America, and Mr. McNamara in particular, say that we have to keep them there?

Mr. Healey: There are many factors, many of which we shall be discussing in the House in the debate on the White Paper in a short time. But I would point out to my hon. Friend that we are not talking about moving blocks of timber about the world. We are talking about moving human beings—soldiers, sailors and airmen, and very often their wives and children. We cannot move people in the same way as we move blocks of timber. I think that my hon. Friend is humane enough to recognise that.

Mr. Stratton Mills: Would the right hon. Gentleman explain to his hon. Friend that one of the reasons for retaining these men in Malaysia and Singapore is that the Governments of both those countries asked him for help?

Mr. Healey: It is certainly true that the Governments of Malaysia and Singapore are anxious for us to retain facilities in those countries and, as the House will know, we intend to do this as long as they remain willing for us to do so.

British Polaris Force

Mr. Brooks: asked the Secretary of State for Defence when the British Polaris fleet will become obsolescent; and when he expects to announce proposals for the British deterrent to succeed it.

Mr. Healey: The British Polaris force, which will in due course take over our contribution to the strategic nuclear forces of N.A.T.O., will be fully deployed in 1969–70. The question of any successor weapon system is therefore premature.

Mr. Brooks: Would not my right hon. Friend agree that the United States Government is at present considering the re-equipment of its own Polaris fleet with the more advanced design of C3 missile? In view of the reports that this missile is eight times as effective as the A3, which is the present equipment of our own Polaris fleet, would not my right hon. Friend accept that the reason underlying this American decision suggests that our fleet may be out of date by about the end of the 1960s?

Mr. Healey: My hon. Friend will, I think, find that although the United States is planning to produce the Poseidon to replace the A3 in some of its own Polaris submarines, it is by no means planning to take all the A3 missiles out of service. I am satisfied on the evidence available to me that there is no danger that the A3 missile will not be capable of carrying out all its functions during the period we envisage having it in service.

Mr. A. Royle: When does the Minister intend to renegotiate the Nassau Agreement, which set up the Polaris fleet in the first place?

Mr. Healey: When it is necessary.

Mr. Hugh Jenkins: Is my right hon. Friend committed to the renegotiation of the Nassau Agreement? Is not the Labour Party opposed to the possession of an independent British nuclear weapon? What is he doing in talking about deploying it in the immediate future? Will he not suffer a similar fate to that now suffered by my hon. Friend on the back benches if he persists in these wrong courses?

Mr. Healey: I do not know to which hon. Friend on the back benches my hon. Friend is referring. I can, however, tell him that we have always made it clear, both in Opposition and in Government, that we regard these ships as a contribution to the collective nuclear deterrent strength of the West, and we intend so to employ them.

Mr. Powell: How can the Secretary of State and that Government take a rational decision on this question if they cannot decide whether, as the right hon. Gentleman says, this is a massive contribution to the deterrent power of the West or whether, as the Prime Minister says, it bears the proportion of a pea on the top of a mountain?

Mr. Healey: All I can tell the right hon. Gentleman is that 64 Polaris missiles are a very massive pea.

Thailand (Assistance)

Mr. Blaker: asked the Secretary of State for Defence what arrangements exist through the South-East Asia Treaty Organisation for ensuring that the military lessons learnt by British forces in East Malaysia are made available to the Thai authorities to assist them in resisting subversion in Thailand.

Mr. Healey: About 50 Thai soldiers a year attend our training courses. We also provide much written material on countering subversion to the Thais and to our other Allies in S.E.A.T.O.

Mr. Blaker: Would the right hon. Gentleman agree that one of the most impressive things about the campaign in East Malaysia was the way in which the British forces succeeded in winning the hearts and minds of the local population? Do the arrangements to which he has referred, and which I welcome, cover passing on that sort of lesson to the Thais?

Mr. Healey: I am grateful to the hon. Member. The whole House should recognise that the hearts and minds campaign, as it was called in Malaysia, played no less a rôle in securing ultimate victory than did the continuous jungle patrolling by our forces. We certainly made this point to all our allies of the area.

Mr. Dalyell: Does my right hon. Friend see in the build-up in Thailand a sinister resemblance to the early stages in Vietnam?

Mr. Healey: No, Sir.

United States (Offset Arrangements)

Mr. Barnett: asked the Secretary of State for Defence to what extent the changes in the disposition of United States forces in Great Britain are to be treated as part of the offset arrangements against the purchase of United States aircraft; and what is the amount involved.

Mr. Healey: I cannot at present say by how much United States stationing costs in this country will be increased as a result of the proposed changes in deployment. As to offset arrangements, the position remains as in my reply of 16th November last to the hon. Member for South Angus (Mr. Bruce-Gardyne). [Vol. 736, c. 105–6.]

Mr. Barnett: Would my right hon. Friend give the House some detailed analyses of the figures of offset to date so that the House can judge whether we might, perhaps, have sold these items anyway?

Mr. Healey: I have already given to the House details of every offset arrangement for which contracts have actually been placed. I can, however, assure my hon. Friend that no sales have been made to the United States under the offset arrangements which we could have reckoned to have a good chance of making without the relief from the Buy American Act provisions which we secured as a result of the offset arrangements.

Mr. R. Carr: For the convenience of the House, will the right hon. Gentleman consider publishing in the OFFICIAL REPORT a collected list of the contracts

so far obtained under the offset agreement?

Mr. Healey: I will certainly consider doing that.

West Germany (British Forces)

Mrs. Renée Short: asked the Secretary of State for Defence if he will reduce British forces in West Germany in view of that Government's repeated refusal to meet support costs which place an unacceptable burden on the British people.

Mr. Healey: I would refer my hon. Friend to the statement made by my right hon. Friend the Minister of State for Foreign Affairs on 12th December last. [Vol. 738, c. 44–51.]

Mrs. Short: Is my right hon. Friend aware that on this side of the House and in the country generally we are tired of the continued refusal of the Government to carry out the pledge that he has made to reduce our forces if the German Government did not pay this cost? Is he further aware that while the West German Government plead poverty and say that they cannot afford to carry out their obligations in this respect, they have recently reduced the Bank Rate in West Germany, which is something that we are apparently unable to do? Will my right hon. Friend now look at this matter again and give a firm assurance to the House that the undertaking given by the Prime Minister and the Chancellor of the Exchequer will be carried out?

Mr. Healey: I can certainly give an undertaking that statements which have been made in the House by myself and other Ministers involving undertakings will be carried out.

Mrs. Short: When? That is what we want to know.

Mr. Shinwell: Is my right hon. Friend aware that we have been given that type of answer for the last fifteen years and that it is about time we had a more satisfactory answer? Is he also aware that there is a very strong suspicion, I believe in all parts of the House, that there is wasteful expenditure in Germany in connection with our military forces there? Will he consider inviting a few Members of the House who are intensely interested in this subject to conduct an independent inquiry into what is going


on in Germany with a view to stopping this wasteful expenditure?

Mr. Healey: My right hon. Friend will be aware that Members of Parliament, both officially and unofficially, frequently visit Germany and investigate what our forces are doing. I also remind him that the Ministry of Defence has in recent years organised an inquiry, carried out by an independent firm of management consultants, to ensure that there is not waste of the type to which my right hon. Friend refers. If, however, he has any specific cases to raise, I will, of course, investigate them.

South Atlantic Station

Mr. Wingfield Digby: asked the Secretary of State for Defence what are his plans for the future of the South Atlantic Station.

Mr. Healey: I have nothing to add to the reply I gave to the hon. Member for Haltemprice (Mr. Wall) on 9th November.—[Vol. 735, c. 288.]

Mr. Digby: If the right hon. Gentleman has in mind withdrawal of the Commander-in-Chief, as, I believe, he said in answer to an earlier supplementary question, is he aware that he is taking a very serious step and that there is a very long distance between the full dockyard facilities at Gibraltar and those at Singapore and that once the Commander-in-Chief leaves, we cannot be sure for very long of the facilities at Simonstown.

Mr. Healey: I made it clear to another hon. and gallant Member earlier this afternoon that all these matters are at present under discussion with the South African Government and that a high-level mission is leaving on Friday to continue the discussion. All these considerations were, however, borne in mind before the Government took their decision, which we have no reason now to change.

Royal Ordnance Factories (Machine Tools)

Mr. Woodnutt: asked the Secretary of State for Defence what advice his Department has sought in respect of machine tool requirements of Royal Ordnance factories during the past two years; and what advice has been received.

Mr. Mason: As well as advice from our own professional engineers, we also got advice from the Ministry of Technology and the Royal Ordnance Factories Board, whose members include distinguished industrialists. This advice stressed the importance of our policy to replace obsolete machines with up-to-date ones, to increase productivity.

Mr. Woodnutt: Is there not something wrong with the liaison between the hon. Gentleman's Ministry and the Ministry of Technology when it is known in the industry that of the 34 machines bought abroad costing nearly £½ million, 25 were obtainable in this country?

Mr. Mason: Personal examination of the technical requirements, the price of the machines and delivery requirements shows that none of the British machines fulfilled these conditions.

Mr. Woodnutt: asked the Secretary of State for Defence if he is satisfied that machine tools of similar type, function and price to the 34 machines ordered from overseas for Royal Ordnance factories during the year 1966 were not available from British manufacturers; and if he will make a statement.

Mr. Mason: Yes, Sir. If British machine tools are available and meet the technical, price and delivery requirements, we buy them.

Mr. Woodnutt: Is the hon. Gentleman aware that it is possible for the Royal Ordnance factories to write out a specification to fit a foreign machine, and that if it were varied slightly the machine would be available in this country? Is he satisfied that that sort of thing is not happening?

Mr. Mason: I must refute what the hon. Gentleman says. What he is trying to do is purposely to have a specification of the British machine tool industry's tools made solely for our own requirements. But we specify what we want, and then, on the technicality, the price and the delivery date, we make a purchase.

Mr. Woodnutt: In view of the unsatisfactory nature of that reply, I propose to raise the matter at the earliest opportunity on the Adjournment.

DEFENCE DOCUMENTS

Mr. Powell (by Private Notice): asked the Secretary of State for Defence whether he has any statement to make about the discovery yesterday of defence documents in a public place.

The Secretary of State for Defence (Mr. Denis Healey): About 50 badly charred documents, which appeared to be official, were discovered yesterday on Chislehurst Common and handed to the police.
The matter is being urgently investigated.
It has not yet been possible to identify any of the documents with certainty or to assess what risk, if any, to national security is involved.

Mr. Powell: Will the right hon. Gentleman tell the House of the result of his investigations when he has made them?

Mr. Healey: Yes, Sir. I certainly undertake to do that. It may perhaps set some minds at rest if I say that we have no evidence at present that any of these documents dates from a time later than 1958.

VIETNAM

The Secretary of State for Foreign Affairs (Mr. George Brown): With your permission, Mr. Speaker, I should like to take this first opportunity to report to the House on recent developments in Vietnam and the efforts that the Government have continued to make to stop the war there.
A number of hon. Members have tabled questions on this subject and I should like to take this opportunity to give them a full statement.
Our policy continues to be directed towards stopping the fighting and promoting a comprehensive and lasting settlement on the lines of the plan I put forward at Brighton on 6th October last year and to the United Nations General Assembly on 11th October.
Because of the loss of life and other suffering in both South and North Vietnam, and with a view to providing the climate for discussion of the political and other issues raised by the conflict, we believe that all immediate efforts should

be concentrated on stopping the war. If this could be done there would be so much more chance of working out a political settlement.
The Government deplore the loss of life in Vietnam however it is caused and in whatever part of the country. In our view, this makes the need for action the more urgent. We are sorry that the Soviet Government are unready to join with us in reconvening the Geneva Conference or, indeed, to join in any other positive step to halt the conflict. We feel that this must not be regarded as debarring us from action.
On 30th December, therefore, I sent messages to Mr. Rusk and to the South and North Vietnamese Foreign Ministers, suggesting a meeting of representatives of the three Governments principally concerned to arrange a cessation of hostilities. I offered facilities on any suitable British territory and said that I would arrange for the secret transmission of messages between the parties if it was considered that this would help.
In making this proposal, I took into account the fact that it has already been made clear that the representation of the Liberation Front at any discussions was not a real problem. I believed, therefore, that the appeal should be directed in the first instance to the Governments who hold major responsibility in this conflict.
As the House knows, the United States and South Vietnam accepted our proposal. We are, therefore, the more disappointed at Hanoi's refusal. Nevertheless, we are continuing to seek ways of bringing the parties to this conflict together and are in close consultation with the United States and other Governments. The United States Government have repeatedly made clear their earnest desire to end the fighting and their readiness to negotiate with the other side. We support the efforts which the United Nations Secretary-General is now making and have made known our readiness to collaborate with any nation or individual within or outside the Commonwealth, in any action offering the prospect of progress towards negotiations.
In conclusion, may I give a purely personal impression to the House? While I cannot quote chapter and verse for this, I have the feeling, and, I repeat,


the feeling, that there is at last the possibility of change in this problem. This feeling results from all that reaches me from many different sources. Hon. Members will wish Her Majesty's Government to continue to do everything they can to encourage and promote this possibility.?

Sir Alec Douglas-Home: The House will be grateful to the right hon. Gentleman. I hope that he will understand that there is no need to persuade the House of the Government's wish to end the war. We all understand that. Is he not aware that there can be no settlement of the problem unless Hanoi agrees and the Soviet Union concurs? Is that not much more likely to be achieved by diplomatic means behind the scenes, than it is by the kind of open diplomacy in which the right hon. Gentleman is indulging? As to the right hon. Gentleman's hunches, I think that it is perhaps kind that I should not refer to them any further.

Mr. Brown: I am not sure that I know what that last remark means. On the first point, the right hon. Gentleman will know from his own long experience that there is more than one level on which these things have to be done and can probably be dealt with. Doing everything by secret diplomacy is also a very dangerous and, I should have thought, out-of-date way of looking at these matters. There is the need to reassure people. There is the need to operate in the open. There is the need to bring other kinds of influence to bear. To do that, one has to make public as well as private efforts. The right hon. Gentleman may assume that the latter are going on.

Mr. Sydney Silverman: While fully sympathising with and congratulating my right hon. Friend on the continuing efforts which the Government make to bring the fighting to an end altogether, does he not consider that the character of the methods with which the war is being carried on is itself a difficulty and an obstacle to the institution of any kind of civilised negotiations?
Does my right hon. Friend remember the Prime Minister publicly dissociating the Government of this country from some of the methods adopted by the American Government long ago? In view of the fact

that the American Government have continued and intensified methods which can only be described as barbarous, does not my right hon. Friend think that the dissociation of this country from those methods ought to be repeated and made clear as a step in the direction of successful negotiation?

Mr. Brown: As I said when I last answered Questions, as I said in my statement, and as I say again now, we deplore the slaughter which is going on in Vietnam. We deplore it, no matter by what means it is being caused. It is as unpleasant by one means as it is by another. I have not the slightest hesitation in stating that I deplore it in the strongest terms, and all the parties involved know our feelings about it. I repeat that I think that it will be of more use, instead of just reiterating our feelings, to try to do something practical to bring the fighting to a stop.

Mr. Heath: Will the Foreign Secretary agree that it is unlikely that Hanoi will come to the conference table until she can be convinced that the Americans will not by any means be driven out of South Vietnam except by agreement at a conference. Will he accept that he and the Government are right to give all the support that they can to the United States? Will he also agree that, when Hanoi is prepared to come to the conference table, safeguards will be required from both sides to all Governments concerned that no one will be able to take advantage of anyone else? Can he assure us that diplomatic talks are going on behind the scenes to achieve that purpose?

Mr. Brown: There are many explanations about Hanoi's reluctance or unwillingness so far to come to the conference table. I am sure that the point which the right hon. Gentleman made is one of them. But there are other factors in this situation, and the events taking place in Asia at the moment may not be unconnected. Therefore, I do not speculate on what has up to now kept her away from the conference table. We must keep on trying to bring about a situation where she will come.
On the question of safeguards, as the right hon. Gentleman knows, in the past there have been allegations from Hanoi


as well as others that they have been let down from time to time, and I agree with the right hon. Gentleman, who I am sure had this in mind, that in anything we do we must try to make sure that we do it in such a way that we are covered against that kind of breakdown and allegations of that kind. One of the reasons which I had in mind for making my six points was that when we got the conference it might be better if it were held at some stage under the ægis of the Geneva co-Chairmen.

Mr. Winnick: Can my right hon. Friend explain why, if we dissociated ourselves from the bombing of oil installations by the Americans last June, we do not dissociate ourselves from the large-scale bombing attacks on Hanoi, which, without doubt, are causing heavy civilian casualties? Will Britain dissociate herself from these bombing attacks? Secondly, will my right hon. Friend urge on the United States and on President Johnson the need to accept the three points put forward by the Secretary-General of the United Nations to bring this bloody and disastrous civil war to a final end?

Mr. Brown: The three points in the statement by U Thant, taken together, provide a basis for ending the war, and they are, if not in exactly the same words, the three basic points in the plan which I put to the Labour Party Conference and to the United Nations Assembly. This is why, when I wrote to U Thant a little while ago, I told him what we were doing was seeking to reinforce his own actions.
There is no need to restate anything that was said some time ago. I am certain that we are at the moment more likely to help in this situation if we make it clear that our opposition is to the whole form of that war, the whole nature of it, and that our intention is to bring it to an end as soon as we can usefully help to do so.

Mr. Burden: Would not the right hon. Gentleman agree that everybody in this House and outside would wish to see an end to this war? Would he not also agree that there have been many initiatives before? We all welcome the action which the right hon. Gentleman is taking, but I am sure he would not wish it to be inferred that this is the first initiative

which has been made. In the past difficulties have arisen because Hanoi has refused to come to the conference table.

Mr. Brown: I certainly would not suggest that nobody was working in this field until I thought of it; certainly not. On the other hand, however, so far none of them has had much success, and one must keep on trying regardless of that. I accept that Hanoi could bring the war to an end today by announcing that she was coming to the conference table, and herself being willing to take the steps to bring it to an end on her side.
Many other suggestions have been made, which I ought not to go into across the Table, about ways and means by which it can be done. All of them so far are held up by the unwillingness of Hanoi to say anything at all.

Mr. Michael Foot: Does not my right hon. Friend appreciate that what he seemed to say about U Thant's proposals appeared to me to be a misrepresentation of them? Will Her Majesty's Government now say quite plainly that they give unqualified support to U Thant's proposals, including his first proposal that we should demand the unconditional cessation of the bombing of North Vietnam? Can he say whether representations to that effect have been made in Washington?

Mr. Brown: I repeat what I said. I believe that the three points made by U Thant, taken together, provide the basis on which the hostilities can be concluded, and I support those three points. They are the same as the ones in my proposals last October and I repeat and support them taken together.

Mr. James Davidson: Will the right hon. Gentleman tell the House what information he has about the use of bases in Thailand by the United States Air Force for its bombing attacks on North Vietnam, and will he say whether he considers that this prejudices our membership of the South-East Asia Treaty Organisation?

Mr. Brown: My understanding of the situation is that the bases in Thailand are not being used for bombing operations.

Mr. Roebuck: Has my right hon. Friend seen the dispatch in yesterday's Christian Science Monitor, in which


President Ho gave his first interview to United States newspapermen for many years and in which he made not unfriendly remarks about the American people as a whole and indicated that he would welcome American technicians in Vietnam? Will my right hon. Friend see this as a ray of light, that it is still possible to get all sides to the conference table, and will he continue his sterling efforts in this direction?

Mr. Brown: That was one of the things, though not by any means the only one, which I had in mind when I said what I did in the last paragraph of my statement. I think that there is a sense of change.

Mr. Sandys: If the Government are actively trying to promote a negotiated settlement in Vietnam, may we ask them to show the same energy in trying to promote a negotiated settlement in Rhodesia?

Mr. Brown: The answer to that is not only that we did, but it was there, and it was rejected by the other party to the talks. May I tell the right hon. Gentleman, with respect, that I think he totally misunderstands the emotion in this country about the Vietnam war if he thinks that that is a suitable basis for that kind of political manoeuvre.

Mr. Mendelson: Has my right hon. Friend seen the latest statement by U Thant in which he told the American Government that after his first contact in the direction of preparing a peace negotiation he was fully convinced that the cessation of the bombing of North Vietnam was the essential first pre-condition for getting a settlement going? Will he give the full support of the British Government to U Thant in that proposal, knowing that all his supporters in the country and many beyond will be behind him if he does?

Mr. Brown: The Americans have repeatedly made it clear, as recently as the State of the Union message, and many times before, that they are ready to stop the bombing the moment they receive some indication, privately or publicly—and I quote—"that that stopping would be followed by some response from the other side". Nothing could be clearer than that, and I think that I ought not to be asked to call on them for more.

Mr. St. John-Stevas: Will the right hon. Gentleman make it plain to the House that he appreciates the courageous stand taken by President Johnson, both in defending Western interests in Asia, and in standing up to those Americans who want an escalation of the war?

Mr. Brown: I apologise to the hon. Gentleman, but I was looking at some papers. Will he repeat his question?

Mr. St. John-Stevas: I apologise to the House for a repeat performance. Will the right hon. Gentleman make it clear that he appreciates President Johnson's courageous stand, both in defending Western interests in Asia, and in standing up to those Americans who want an escalation of the Vietnam war?

Mr. Brown: As I said when I spoke here before, I was most impressed when I was in the United States, and I have been since, with the way in which President Johnson, faced with what must be an exceedingly difficult situation, is resisting the pressure to escalate this war, and is lending all his authority and all his efforts to finding a basis on which hostilities can be called off. I think that that should be said. Our business is to try to help to find a basis for it.
It must be remembered that the bombing stopped once before, and stopped for some time, but nothing happened in response. What I think we must try to do here is to bring home to Hanoi that if we can get, I repeat, privately or publicly, through any recognised channels which can be relied on, some indication of what would follow in response, then I think we could start doing business right away.

Mr. Atkinson: Five or six answers ago my right hon. Friend said that he deplored this whole war and rejected its whole purpose. Is he now saying that the British Government now reject totally the whole purpose and strategy of American policy in Asia, and particularly in Vietnam, and that the whole basis of future initiative by the Government will be their rejection of the purpose of an American existence in Vietnam?

Mr. Brown: My hon. Friend has his own views on record. He has used me as a vehicle for them quite improperly. I never said anything of the sort. I deplore the war. I reject the means by


which this or any other war is carried on. But I was not discussing the policy of either side that has brought it about. I would refer my hon. Friend to the speech that I made at the weekend—I will be glad to send him a copy of it—in which I spoke in the opposite sense to that in which he now invites me to speak.

Mr. Goodhart: Does the right hon. Gentleman agree that these grossly exaggerated and inaccurate attacks on the American policy of comparative restraint only strengthen the hands of those Americans who wish to intensify the war in North Vietnam, in order to win a quick victor?

Mr. Brown: Yes, but one must not go from one extreme to the other. What is happening there is deplorable, and one might just as well say that whether it happens in North or South Vietnam. The point is that the Americans are ready, willing and anxious to stop, and are inviting the help of people to enable them to stop. We have not had that approach at all from the other side yet.

Mr. Driberg: When my right hon. Friend says, as he did in his statement, that representation of the National Liberation Front is "not a real problem" in connection with peace talks, does he mean that that is now acceptable not only to the Americans, who originally rejected it, but also to the Saigon Government? Is he satisfied that his phrase will be understood in Hanoi, in Saigon, and by the National Liberation Front?

Mr. Brown: I carefully used words that have been used in public about this matter, and I am quite convinced that they are right, and that if we can get discussions set up the question of the representation of the National Liberation Front will not be a problem for either of the participants.

Sir C. Osborne: Has the right hon. Gentleman used the offices of our Chargé d'affaires in Peking to see whether anything can be done from that quarter to help to end the war?

Mr. Brown: It would be injudicious of me to pick out any of our missions abroad, especially in that part of the world, and to discuss what they have been doing, but the hon. Member can

assume that I am in the closest touch with them all.

Mr. Orme: Are not the facts the opposite way round to what my right hon. Friend has stated, in respect of the reticence of the Americans to extend the war? Are not they escalating the war? What comment has he to make on the movements now taking place in respect of the fighting in the Delta triangle? Will this mean an extension of land warfare into North Vietnam? What are my right hon. Friend's views about that?

Mr. Brown: One reason why I am so anxious about all this and have been pressing so hard, both publicly and privately and in all kinds of quarters, is that I recognise only too well that if this war goes on one of the inevitable consequences is that it will escalate. It is not the sort of conflict which can be maintained at one level. That is the great danger. That is one reason why we must try to concentrate everybody's attention on the grave need for bringing about a cessation as soon as we can.
I have seen the reports of the operations in the Mekong Delta. A cleaning-up operation in the villages there, so that some kind of regular, civilised, orderly life may go on there, is inevitable. I know that South Vietnam and the United States are making determined efforts in education, health, the care of refugees, agricultural improvement and the control of inflation to re-establish effective and proper life in that area. It is worth calling to mind the fact that the American Government alone contribute 700 million dollars a year to these constructive efforts.

Mr. Hastings: How exactly does the right hon. Gentleman feel reassured—to use his own words—by this initiative in view of the not inconsiderable vocal group of his own hon. Friends who are no more than apologists for the Vietcong?

Mr. Brown: That will be seen everywhere as a notably helpful contribution. As I said at the time, I still puzzle over those who find it more convenient and to their taste to attack those who are trying to get the war stopped, instead of trying to do so themselves.

Mr. Will Griffiths: Does my right hon. Friend recall that a few weeks ago, in the House, he appeared to accept the


American military claim that non-military targets were not being bombed in Vietnam? Has he since seen photographs in British newspapers showing the wholesale destruction of homes in Hanoi 100 yards from the centre of the city? What has he done about that? Has he at least repeated to the President of the United States the protests that the Prime Minister made a few weeks ago, or is he going on giving the appearance of a kept man of the Pentagon?

Mr. Brown: I am obliged to my hon. Friend. In view of what was said at the time I checked up the report of what I said in this House on 19th December and discovered that there is nothing there that is inconsistent, inaccurate or needs explaining away. It is not American policy to bomb civilian targets. That is what I said I accepted, and that is clearly still the position. I never said—and I would not be so concerned about stopping the war if it were possible to say it—that in such a war civilians will not get killed. This is one reason why I am so concerned to stop the war. In any case, my hon. Friend will have noticed that since December the Americans have not bombed targets nearer than 15 or 16 miles to that city.

Mr. Hugh Fraser: Does not the right hon. Gentleman agree that in spite of his goodness of heart the attitude of the Government is becoming daily more absurd and is carrying less and less conviction in the rest of the world, for the simple reason that he is neither genuinely neutral nor genuinely partisan?

Mr. Brown: I do not know which of those two the right hon. Gentleman would wish me to be. If he means that he wishes me to commit Britain to the war I cannot think of anything more out of keeping with the views of people in this country and elsewhere. As for his view of our efforts, my impression in going round the world, as well as being in daily touch with colleagues of all kinds all over the world is that hardly anybody would share his views.

Dr. Owen: Is my right hon. Friend aware that his initiatives for peace have reassured many Members of the House and millions of people in this country, and that this is not a laughing matter? Most people are desperately concerned

about this war and realise that the Foreign Secretary must adopt a position between the two extremes, and that there are many things which cannot and should not be said in this House?

Mr. Brown: I am very much obliged to my hon. Friend. The Opposition are entitled to make their own choice of what they regard as laughing matters. They are entitled to decide that it is their business to oppose all the time, irrespective of the merits of what they are doing, but the country will draw the proper conclusion from that attitude.

Mr. Heath: Is the Foreign Secretary aware that for the first time he has rather lapsed below the level which he had been maintaining? Will he agree that the Opposition have been supporting him both in the efforts that he has made to work with the Americans and his efforts to achieve a peaceful solution of this problem? In fact, we have been supporting him against the attacks of many of his own side below the Gangway.

Mr. Brown: When the right hon. Gentleman looks tomorrow at the OFFICIAL. REPORT of some of the questions that have been put to me from his side of the House he will find that that support is sometimes curiously expressed.

Mr. Shinwell: Referring to the statement made by an hon. Member opposite that hon. Members on this side of the House who have been vocal and even aggressive about seeking to bring the war in Vietnam to an end, is my right hon. Friend aware that those hon. Members are associated also with people like myself, who are not apologists for the Vietcong? We praise my right hon. Friend for the efforts that he has made, but feel that all the exhortations, appeals, protestations, resolutions, and even the efforts of U Thant are of little avail. and that something constructive has to be put to the United States and Hanoi?
May I make a suggestion to my right hon. Friend and ask him—

Mr. Hastings: On a point of order. Is it not incumbent even on the right hon. Gentleman to ask a question?

Mr. Speaker: The right hon. Gentleman is coming to his question.

Mr. Shinwell: I apologise to the House for the length of this question,


but I have listened to many questions from both sides of the House and I want to put my point. [HON. MEMBERS: "Order."] If hon. Gentlemen opposite will not have it this way, they can get it another way. There is nothing on that side that I am afraid of.
Would my right hon. Friend consider the proposition that the United States should offer to withdraw—not immediately, because it requires logistic preparations and would obviously have to be phased over a period—on the understanding from Hanoi, either directly or through U Thant, that it is prepared to desist in aggression against South Vietnam? If that offer is made—so far I am not aware that any such offer has been made—would it not be worth putting to both sides?

Mr. Brown: I should like to associate myself with my right hon. Friend in wholly deploring the question from an hon. Member opposite about the association of those who feel that I ought to do something different or something more with the Vietcong. This was quite unworthy. There is room here for more than one point of view about how far one ought to go and I do not complain that some of my hon. Friends are passionately concerned about the things involved in this war and the whole question of peace, but who think, perhaps, that one ought to do something different. Equally, I must be allowed to justify my choice of the way to proceed.
As I said in my statement and have said many times, if Hanoi would give an indication, publicly, privately through U Thant or direct through the Russians or ourselves, of some significant act of deescalation, if I may use that horrible word, which she would put into operation, there would be no difficulty, as the President himself has declared, in getting the bombing stopped and starting on the road which would lead to the ending of hostilities and the calling of some kind of conference. The difficulty is that so far we have not been able to get any kind of sign from Hanoi. That is precisely one of the things which we are continuing to operate for.

Mr. Blaker: With regard to the attitude of Hanoi, what is the Government's latest information about the rate at which troops are being infiltrated from North Vietnam to South Vietnam?

Mr. Brown: I. do not carry that information with me and it is unlikely that I would be able to provide very much which is accurate in that field. We are, of course, represented in Hanoi, but, as the House will know, the movements of our representative are fairly limited and our opportunities to observe or assess movements of that kind are pretty well non-existent.

Mr. Rankin: Would my right hon. Friend consider this? He wants Hanoi to give a sign. Would he not also ask the Americans to give a sign and remember that they have an invading force in Vietnam of 425,000 troops? Would it not be a good indication of their desire for peace if they stated that they would withdraw that invading force if Hanoi were to give a sign that it wanted to talk?

Mr. Brown: We ought to remember to be fair here. We must, if we hope to influence the course of events. The Americans have said repeatedly, not only to me privately when I saw the President, but in public, that they are ready to take the first step. They are ready to join in either de-escalating or ceasing hostilities. They are ready to go to the conference table to work out a political settlement. They have no desire to maintain a military presence for any length of time, let alone for ever. They have said all these things. What we are waiting for is Hanoi to indicate that she will join in and how she will join in. It is no use my hon. Friends thinking that they are making a contribution to a good, acceptable and honourable settlement of this war merely by saying that the Americans should go away and the Communists take over.

Several Hon. Members: rose—

Mr. Speaker: Order. We must proceed with the business of the House.

BALLOT FOR NOTICES OF MOTIONS

Taxation System (Simplification)

Mr. Grant: I beg to give notice that on Friday, 27th January, I shall call attention to the need for simplification of our taxation system, and move a Resolution.

Ministry of Housing Order (Statutory Instruments Committee)

Mr. Maxwell-Hyslop: I beg to give notice that on Friday, 27th January, I shall call attention to the action of the Minister of Housing and Local Government in submitting an Order for the approval of this House, prior to its consideration by the Statutory Instruments Committee, and move a Resolution.

Real and Leasehold Property

Mr. Longden: I beg to give notice that on Friday, 27th January, I shall call attention to various proposals of Her Majesty's Government to alter the law relating to the disposal of real and leasehold property, and move a Resolution.

BILL PRESENTED

REMUNERATION OF TEACHERS (SCOTLAND)

Bill to make new provision for determining the remuneration of teachers in Scotland; and for purposes connected therewith, presented by Mr. William Ross; supported by Mr. Bruce Millan, and Mr. Niall MacDermot; read the First time; to be read a Second time Tomorrow and to be printed. [Bill 168.]

CRIMINAL RESPONSIBILITY

4.8 p.m.

Dr. M. P. Winstanley: I beg to move,
That leave be given to bring in a Bill to widen the definition of insanity in relation to the criminal law and thereby replace the M'Naghten Rules; and for connected purposes.
May I make it clear at the outset that it is not my—[Interruption.]

Mr. Speaker: Order. Will hon. Gentlemen please leave the Chamber quietly.

Dr. Winstanley: May I make it clear at the outset that it is not my intention here to enable my colleagues in the medical profession to usurp the prerogatives of the judiciary? Indeed, I am aware that they have difficulty enough already in coping with the existing burdens on their shoulders. Secondly, although I hope that a Measure like this would result in very much more humane treatment being accorded to certain mentally deranged criminals, it is also no part of my intention to place impediments in the way of the proper prosecution of the law.
My main object is to provide urgently needed protection both for the general public and for prison officers and to relieve them of dangers to which they are at present being unnecessarily subjected. The legal formula governing insanity in relation to the criminal law was laid down, of course, about 120 years ago, in another place, in the form of what are known as the M'Naghten Rules. These rules were formulated following the case of Daniel M'Naghten and they are still in force despite the fact that they have been almost constantly subjected to criticism and attack, not only by the medical profession but by lawyers and members of the general public.
I do not need to repeat the various attacks that have been made over the years, but it is interesting to note that as long ago as 1874 the noble Lord, Lord Bramwell, giving evidence to the Select Committee on the Homicide Law Amendment Bill in June, 1874, said that
the present law lays down such a definition of madness that nobody is hardly ever really mad enough to be within it.
That is the kind of view which has been held by the many people who have frequently criticised this form of the law. We had much criticism at the time of the


Royal Commission on Capital Punishment, since when we have had a general acceptance of the fact that the M'Naghten Rules, while they provide a basis, do not necessarily provide a satisfactory one.
Briefly, the important rules—two of them; there are others which are less important today—provide that a person can only be found insane in relation to a criminal act if, first, he is unaware of the nature and quality of the act which he is doing, or, secondly, if he is so aware, that he is not aware that that particular act is wrong.
Many people have held that we should alter the law to embody provisions to cover the type of mental abnormality which could result in a person, while he was aware of what he was doing, or while he might be aware that what he was doing was wrong, was none the less subject to an uncontrollable impulse or otherwise unable to control his behaviour.
It is true that we had an improvement in this direction in the Homicide Act, 1957, which brought in a new principle, that of diminished responsibility, and made it possible in the case of a person accused of murder for the charge to be reduced to manslaughter if the person was found to be suffering from disease of the mind such as to make him unable to control his actions. How satisfactory this is I rather doubt. Indeed, I am inclined to agree with an eminent authority, Dr. Howard Jones, who, in his excellent book "Crime and the Penal System", says:
Many will feel that a procedure by which insane persons can be sentenced to prison for manslaughter is hardly a satisfactory final solution.
I would add that it is certainly not a satisfactory solution for prison officers who then have the responsibility to care for this mentally deranged person. They have neither the training nor the necessary skill to deal with these people, nor are they properly equipped so to do. This is no criticism of our penal institutions. It is no criticism of the quality of our prison officers. It is merely that they are not people who have received a training in the management of insane persons.
Murder is not the only question involved here, but I want to say a word or two about it, because I believe that we have had a change in relation to this

problem with the abolition of capital punishment. At the time when capital punishment for murder was in force, there was a fairly strong incentive for an accused person to plead insanity if there was any question of mental abnormality, and he did so plead. But now that capital punishment has been abolished the same incentive does not exist, and there is evidence that a person would prefer to be sentenced to imprisonment rather than to a Broadmoor-type of institution, which would be the case had he been found insane.
I would remind the House of a case which is familiar among hon. Members. Indeed, one hon. and learned Member was involved in it. It was the case of a young man, of 17 years of age, relatively recently convicted of murder. At the time, there was grave doubt as to his mental state, and it was suggested by several persons that he suffered from schizophrenia. However, he did not plead insanity, understandably. He would not have been executed in view of his age and presumably preferred prison to Broadmoor. He went to prison, and within two years he had murdered another prisoner. It was a case in which our second line of defence, that of the various methods of examination of prisoners prior to and following sentence had broken down. It is no criticism of the people involved.
I want now to move to a slightly different problem, and a rather important one, that of the question of violent crime which does not involve murder. Let us take the case of Christie, who was clearly M'Naghten sane, knew what he was doing and the quality of his act and knew that it was wrong. He was executed. Had capital punishment not been in force he would not have been executed but would have been sent to prison. I accept the assurances that the Home Secretary has given the House that very careful consideration is now given to these people and, therefore, they will not be released until they are considered wholly safe to be released.
But if Christie's particular peculiarities and mental abnormalities had resulted not in the death of his victims, but in those victims being maimed, he would undoubtedly not have produced a plea of insanity, and the prosecution would not


have had the right to introduce that plea, and then he would have had to be sentenced to prison for a violent offence; and, necessarily, on the present basis of our law, the sentence would have had to be a finite sentence which would come to an end with his release.
If it were possible for the prosecution to introduce this factor of insanity, it would then be possible to sentence a potentially violent criminal, who suffers from an abnormality of the mind to such an extent that he is liable to repeat his offences, to Broadmoor. This would be both more humane and certainly very much safer for the general public and also for the prison officers. I am informed that there is no record of a person having been released from Broad-moor and repeated this particular type of offence. One realises, however, that some have escaped and repeated the offence, but we are aware that people escape from other institutions. The incidence of repetition of crime after release from the Broadmoor-type of institutions should be compared with the extent of repetition following release from prisons, which is so common as to be the rule rather than the exception.
With a case such as a criminal psychopath, it ought to be possible for the prosecution to introduce the factor of the person's mental state, and, if necessary, to be able to sentence him to Broadmoor so that he will not be released until such time as he is found safe for release. For the criminal psychopath, this means until he has matured. Under the present system, a judge has to guess how long this period will be, and his guess is necessarily limited, because the

length of sentence may be prescribed by law.
To put this right the court must be permitted as of right to pronounce upon the accused's mental state. It is not a new responsibility. The court already has to make its decision if the defence introduces the question. Sometimes it has to adjudicate on whether an accused person is mute of malice or unable to plead and so on. I believe that if the right were given to our courts to introduce the question of insanity and if, at the same time, the definition of insanity were widened to include uncontrollable behaviour, we should arrive at a situation in which we should be able both to protect the public and to protect prison officers from the dangers to which they are at present exposed.
I have discussed this matter with members of the medical profession, who agree entirely, and with many members of the legal profession, who also agree, and I have found that nobody opposes the idea. I very much hope that the House will give me leave to introduce the Bill.

Question put and agreed to.

Bill ordered to be brought in by Dr. Winstanley, Mr. S. C. Silkin, Mr. Carlisle, and Mr. Hooson.

CRIMINAL RESPONSIBILITY

Bill to widen the definition of insanity in relation to the criminal law and thereby replace the M'Naghten Rules; and for connected purposes, presented accordingly, and read the First time; to be read a Second time upon Friday, 14th April, and to be printed. [Bill 167.]

Orders of the Day — IRON AND STEEL BILL

As amended (in the Standing Committee), considered.

New Clause No. 1.—(PUBLICATION BY CORPORATION OF LISTS OF PRICES AND CONDITIONS OF SALE.)

(1) The Corporation shall from time to time publish, in such manner as appears to them best adapted for informing the persons affected, and in such form as appears to them appropriate, notices containing prices which they propose should, in normal circumstances, be charged in the United Kingdom by them and publicly-owned companies for iron and steel products, and terms and conditions on which they propose iron and steel products should, in normal circumstances, be sold in the United Kingdom by them and publicly-owned companies.

(2) The Corporation may in such a notice provide for the variation of a price term or condition published therein, according to such circumstances as may be specified therein.

(3) Subsection (1) above shall not apply to products of an activity specified in paragraph 4 or paragraph 6 of Schedule 3 to the 1953 Act except such, if any, of those products as the Minister may by order specify.—[Mr. Marsh.]

Brought up, and read the First time.

4.20 p.m.

The Minister of Power (Mr. Richard Marsh): I beg to move, That the Clause be read a Second time.

Mr. Speaker: It would, I suggest, be convenient for the House to discuss, at the same time, the proposed Amendment to the Amendment standing in the name of the right hon. Member for Altrincham and Sale (Mr. Barber), in line 1, leave out from 'Corporation' to 'may' in line 8 and insert:
'may from time to time publish and shall cause all or any of the publicly-owned companies to publish notices, setting out, in such form and manner as may in the judgment of the Corporation or such publicly-owned company best inform intending buyers of iron and steel products the prices that the Corporation or such publicly-owned company will charge in the United Kingdom for iron and steel products and the terms and conditions applicable to any sale or supply of such products.
(2) The Corporation and any publicly-owned company'.

Mr. Marsh: Yes, Mr. Speaker.
This is the first of a number of Government Amendments and new Clauses

which have arisen out of contributions made in Standing Committee D and as a result of long discussions that have taken place between the Government and representatives of the industry and various persons involved in the industry in general.
Fears have been expressed by both those directly concerned with the steel industry and others about the position of the private sector. They have pointed out that the private sector will be faced with a new situation and a very powerful nationalised steel organisation. There is truth in that, in so far as it will be a very powerful body with an annual turnover of about £1,000 million. However, many of these fears have been exaggerated, although I accept that they exist.
The Government have made a considerable attempt to meet these fears at every possible point and the result is the considerable number of Government Amendments and new Clauses appearing on the Notice Paper. This is the first of them, and it is designed wholly and solely to meet the fears that have been expressed to the Government by the representatives of various sections of the industry.
Our discussions in Committee went on and on and on. This subject was debated at considerable length and requests were made that the Corporation should be under an obligation to publish the prices of its products. This request was made for obvious reasons. The only difference between the original representations and the new Clause is that—and I referred to this in Standing Committee and thought that this would be the result—the Clause is designed to ensure that it is necessary for the Corporation to publish only its normal prices.
It is essential to draw this distinction, because it would be impossible in reality to place on the Corporation an obligation to publish all its prices and trading terms. There must obviously be an element of flexibility. I say that because, for example, the position could arise when, in the public interest, the Corporation should be able quickly to change its prices so that it could compete with, say, imports.
Having said that, the Clause is self-evident. It requires the Corporation to publish the normal selling prices to be


charged both by itself and by the publicly-owned companies for, and the normal terms and conditions of sale of, iron and steel products. The right hon. Member for Altrincham and Sale (Mr. Barber) introduced an Amendment on these lines in Committee and on that occasion I agreed to seek to introduce an Amendment which would enable this point to be covered.

Mr. Brian O'Malley: Would my right hon. Friend define more clearly what is meant in the new Clause by "normal circumstances"? For instance, could it not be argued that the circumstances prevailing at the moment are highly abnormal? This is bound to be the case when one has a high level of imports, on the one hand, and, say, 70 per cent. running capacity, on the other. What would my right hon. Friend describe as "normal" and "abnormal"?

Mr. Marsh: The position seems clear. It is difficult to define the legal position in terms which the layman can understand. Lawyers are able to go into these matters at much greater length and with much greater obscurity. It is clear that I am referring to the prices charged by the Corporation for the products which are normally in use; those applied in the vast majority of cases as a normal matter. As I explained, from time to time there will inevitably be a move away from the general level to other levels to meet particular circumstances.
The principle and intention is that the prices charged and the Corporation's terms shall be published—except that there must be sufficient flexibility to enable the Corporation to move quite rapidly to meet some unforeseen circumstances.
Subsection (3) of the Clause provides that these obligations which we are placing on the Corporation shall not apply to castings and forgings—that is, unless the Minister makes an order saying that they should. The reason for this is simply because it is accepted that the provisions of the Iron and Steel Act, 1953 apply in respect of these activities.
The case was well put by the then Minister of Supply, the right hon. Member for Streatham (Mr. Sandys), who said:

… castings and forgings … we feel, fall into a different category from the iron and steel products at the heavy end of the industry. There are so many firms in this section of the industry—foundries and forges—and it is so relatively easy for newcomers to enter it, as compared with the great financial cost involved in entering the heavy end of the industry, that we feel that normally it is reasonable"—
Hon. Gentlemen opposite should note the use of the word "normally" in that context. There is, therefore, a good precedent for our using the word—
to rely upon competition to assure to the consumers protection against excessive prices". —[OFFICIAL REPORT. 24th February 1953; Vol. 511, c. 1997.]
The same general principles in relation to castings and forgings will apply following the passage of this Measure. The Corporation, despite its great size, will control only 9 per cent. of the steel castings output. It will control only 24 per cent. of the iron castings industry. However, if circumstances should arise when it appears desirable to extend the Corporation's activities, I have, as Minister, power under subsection (3) of the new Clause to make it an obligation for the Corporation to publish its prices relating to castings and forgings, and the Minister may do that by order, remembering that he is always answerable to Parliament for the use he makes or does not make of the powers conferred on him by this subsection. That order will be subject to the negative Resolution procedure because the affirmative Resolution procedure does not seem necessary since only the Corporation could be prejudicially affected by such an order.
The Opposition's Amendment to the Clause is defective, particularly since it leaves the form of the notice and the manner of publication to the publicly owned companies rather than to the Corporation. This is the wrong way of dealing with a matter as important as this. We should not charge the publicly owned companies with a responsibility for which they are not held responsible to the Minister. The Corporation is the body directly responsible to the Minister. However, I have no doubt that the right hon. Member for Altrincham and Sale will elaborate on that point.

Sir Gerald Nabarro: Does the right hon. Gentleman mean that the Corporation will be in a position to stipulate different prices for


different steel products by different steel companies, or will there be uniformity in pricing for all the 14 companies? That is the critical point.

Mr. Marsh: We will come to that later. I am at the moment dealing with a new Clause which is concerned solely with the publication of prices. I have no doubt that the right hon. Member for Altrincham and. Sale will explain the aims of the Amendment, after which, when I know his case, I will be in a better position to reply.
As I explained, the new Clause is merely concerned with the publication of prices and to ensure that those facts will be available to those who are interested in this matter and who will obviously react accordingly.
If the Amendment were accepted it would mean that the publicly-owned companies would be in the position of not having to pay attention to the views of the Corporation on the form of the notices and could ignore the Corporation in this matter, even if the Corporation were acting in response to a request by the Minister or hon. Members. As I explained, the Corporation will be responsible. to the Minister in such matters and not the individual companies. I do not believe that hon. Members would wish to create a situation in which an obligation in this important matter were placed on bodies over which the Corporation had no direct control and which was not directly responsible to the Minister.
As I said at the outset, the Clause is designed specifically to meet the understandable wishes of people in the industry. The Government have given a great deal of thought to this matter and have, as a result, introduced a provision which provides for the publication of this information but which, at the same time, makes it possible to have sufficient flexibility for the Corporation to act quite quickly if such an act were in the interests of the Corporation and the industry.

4.30 p.m.

Mr. Anthony Barber: I understand that perhaps the most helpful procedure with the new Clauses and Amendments is that when there is an Amendment to a new Clause the hon. Member in whose name it stands should follow the Minister, although not moving his Amendment, and then later, if it is

wished to press the matter to a Division when the whole discussion is complete, should move the Amendment formally then.
It is good to see the right hon. Gentleman here again at Westminster, refreshed after his long Christmas holiday and in such a conciliatory mood. I am sure that when he hears the arguments which my hon. Friends and I propose to adduce in its favour, he will either accept the Amendment, or, if he thinks that it could be drafted better, will make an appropriate Amendment himself when the Bill is considered in another place.
My first words must be words of congratulation and welcome to the new Parliamentary Secretary, the hon. Member for Willesden, East (Mr. Freeson). Nobody doubts his sincerity or his ability. He is very well fitted to deal with this, a nationalisation Bill. I say that because in his election address he wrote:
We reject the selfish, greedy doctrines of capitalism.
and went on:
This means an expansion of common ownership—State-owned industries and firms, producer and consumer co-operatives and municipal ownership—substantial enough to give the community power over the commanding heights of the economy.
Fortunately for the House, the country and the steel industry, the Minister of Power, as we know very well, takes an entirely different view. As he has just told us, the central purpose of the new Clause is to safeguard just those 200 companies, that 10 per cent. of the industry, which is to continue to operate under the "selfish, greedy doctrines" of capitalism.
This new Clause, providing for the publication of prices, stems directly from a debate which we had in Standing Committee D, a debate which took place at about two o'clock one morning. It represents an important concession to the private sector and to the Opposition and we welcome the Government's acceptance of the principle. But, for reasons which I shall adduce, we believe that as it stands the new Clause is defective and that an Amendment on the lines suggested should be accepted.
We have many matters of substance to consider. I think that I am right in saying that there are 10 new Clauses for debate and that Mr. Speaker has


suggested that, quite apart from Government Amendments, well over 40 Amendments, in the names of my hon. Friends and hon. Members opposite, should be considered. Obviously, we cannot in any event complete the Bill in the three days allotted by the Government. Be that as it may, because of the great deal of work which we have before us. I intend to be as brief as possible on this Amendment.

Mr. John Peyton: Does my right hon. Friend the Member for Altrincham and Sale (Mr. Barber) think that this moment would be appropriate for him to send a resounding welcome to the Chief Secretary, even though we must expect that his contributions will be somewhat disappointing?

Mr. Barber: I am very grateful to my hon. Friend the Member for Yeovil (Mr. Peyton) for drawing my attention to the presence of the Chief Secretary. I had not noticed that the right hon. Gentleman had come into the Chamber. After our experience in Standing Committee D, it is, to put it mildly, quite a change to see the right hon. Gentleman with us. No doubt we can look forward to hearing him reply to this debate.
The present pricing system in the steel industry is wholly inappropriate. It is inflexible, it is outdated and, in practice, as everybody knows, it stultifies price competition, which we believe to be essential to efficiency. The steel industry has repeatedly urged upon the Government that it should be allowed to adopt a pricing system not identical with, but comparable to the system used in the European Coal and Steel Community. The Iron and Steel Board, a Government agency, agreed entirely with the industry and with the case which is put to the Government.
But the Minister who is now the Colonial Secretary—[Interruption.] He is at the Department of Economic Affairs, the Chancellor of the Duchy of Lancaster; these Members move so quickly that it is very difficult to follow, but I am talking about the right hon. Gentleman's predecessor as Minister of Power—refused to allow the change to provide for more flexible and competitive pricing

which was put to him by the industry and by the Iron and Steel Board. He even threatened, if necessary, to bring in legislation to block this more flexible system which everyone else believed to be in the national interest, and he did so against the advice of a Government agency, the Iron and Steel Board. Likewise, the present Minister of Power has taken the same view.
This is the background to the Amendment. I would like, therefore, to ask the right hon. Gentleman two simple questions. First, will the new Clause allow the nationalised industry to adopt a system analogous to the E.C.S.C. system? Secondly, is it still the Minister's intention to block any such move if the new National Steel Corporation considers it to be desirable? I am not arguing the merits of the E.C.S.C. system, nor pretending that it will not change. Indeed, I would think that it certainly would. But we should know what it is possible for the Corporation to do under the Clause and I would be grateful for information on those questions.
I now turn to the detail of the new Clause and the Amendment. The Clause is welcome as far as it goes, but it suffers from a number of defects with which I shall deal only briefly, because the same issues are raised in later new Clauses which have been selected for debate. The first is that the duty of publishing the prices lies solely on the Corporation. As I understood it, in his cursory observations on the Amendment the right hon. Gentleman said that it would not be appropriate for the operating companies to publish the prices, because they were not directly responsible to the Minister, but only indirectly through the Corporation.
That is absolute nonsense. Are we to take it that anything which happens in one of the operating companies is not the responsibility of the Minister, that he will not he answerable for what the operating companies may do, even though they may be allowed a great deal of autonomy by the Corporation, always assuming, of course, that it is not a matter of day-to-day administration? Surely, on matters of substance and policy, the right hon. Gentleman is just as responsible for the actions of the operating companies as he is for the Corporation itself.
Therefore, the first objection is that the duty of publishing prices lies solely on the Corporation, a monolithic State organisation, what the Chancellor of the Duchy of Lancaster described as a single unit of direction. If this structure of the Corporation with a single unit of direction for the nationalised industry is not modified, then, for all the Minister's good intentions, it will eventually go the way of all nationalised industries. It will become top-heavy; it will become over-centralised; it will become rigid and, ultimately, it will become inefficient.
There is one way to minimise these hitherto common attributes of State ownership. That is to inject an element of competition. This Amendment seeks to do just that by providing for the 14 companies to be nationalised, or groups of those companies, to publish their own prices, which may differ according to their own particular circumstances and their own efficiency.
If I do not now elaborate the advantages which I believe there to be of competition within the nationalised industry, that is only because the point arises later on new Clause 4—Duties of Corporation and Minister relating to organisation—but there is a second advantage of this Amendment which also has a bearing on a later Clause, new Clause 13—Duty of Corporation relating to names and trade marks and publicly-owned companies. This Amendment, by enabling individual companies to publish their own prices, deliberately encourages the use of existing company names, which I should have thought everyone would agree would have far more customer appeal than will ever be achieved by the new nationalised body.
There are a number of other advantages of the Amendment which I shall leave for my hon. Friends to deal with. One was touched on by the hon. Member for Rotherham (Mr. O'Malley). The Amendment in my name does not involve the phrase "in normal circumstances", which is in the Minister's new Clause and which, I agree, is a very difficult one to interpret
I conclude with this appeal. The principle of a nationalised steel industry has been accepted by the House of Commons on Second Reading. This is the first time in our history that the State is taking over a great manufacturing industry. The

object at this stage of us on these benches is to make the best of what we believe to be a thoroughly stupid decision. We can at least save something if we provide for an element of price competition within the National Steel Corporation. The nationalisation of a major manufacturing industry is an entirely new venture for Britain. It requires an entirely new approach, an appproach to the operation of the industry quite different from that which may have been appropriate for a nationalised service industry. It is in that spirit that I commend this Amendment to the House.

Sir G. Nabarro: I rise to support the Amendment in the names of my right hon. Friend the Member for Altrincham and Sale (Mr. Barber), my hon. Friends, and myself. The matter has been fairly exhaustively debated in Standing Committee D which occupied so much of our time during the months of October, November and December. There are two objections to the lengthy new Clause moved by the Minister. The first is the use of the words "normal circumstances". The second is his failure to be much more precise and definitive as to what he means by the term "prices". I wish shortly to deal with both of these points at the outset.
"Normal circumstances," to me, means, if all of us in this House an both sides support policies of full employment, the operation of a basic industry such as iron and steel to maximum capacity. Maximum capacity in the steel industry is generally interpreted to mean 94 per cent. of the stated aggregation of output in terms of ingot tons. It is now well known that the capacity of the British iron and steel industry is 31 million ingot tons; that it produced 27 million ingot tons in 1965; 24 million ingot tons in 1966, and is to produce only 22 million ingot tons in 1967—judged by present order books and the best estimate which may be made of conditions which will relate to the affairs of the industry and our economy generally during the remainder of 1967.
4.45 p.m.
An output of 22 million ingot tons represents only 70 per cent. of capacity, a point touched upon in an intervention by the hon. Member for Rotherham (Mr. O'Malley). Does the Minister


consider" normal circumstances" to be 70 per cent. of capacity? I do not. It is that kind of thing which renders the whole of his new Clause innocuous by failing to relate the term "normal circumstances" to the capacity of the industry. I believe that all my hon. Friends and I, if called upon to interpret "normal circumstances", would say, "In conditions of full employment I mean by normal circumstances the operation of the industry to maximum capacity."
When the Minister answers I hope that he will tell us a little more of what he means by "normal circumstances" because, though he quoted my right hon. Friend the Member for Streatham (Mr. Sandys) in 1953, he failed to draw the attention of the House to the fact that he was quoting my right hon. Friend in a debate. My right hon. Friend did not seek to write into a Statute these words, "normal circumstances". Did he? No, he did not.

Mr. Marsh: Assuming that the hon. Member knows the answer, there is not much point in asking me.

Sir G. Nabarro: I am performing a function of the Opposition, and a very legitimate function. What the Minister means is that he has to despatch that monastic figure seated behind him, the hon. Member for Faversham (Mr. Boston) to the civil servants' box to get the answer. I hope that the hon. Member for Faversham will now perform his customary sprint to the civil servants and back again.

Mr. Terence Boston: I am sure that the hon. Member for Faversham is far more capable than the hon. Member for Worcestershire, South (Sir G. Nabarro) of performing "the customary sprint".

Mr. Peyton: I hope my hon. Friend the Member for Worcestershire, South (Sir G. Nabarro) will not allow himself to become unfair to the hon. Member for Faversham (Mr. Boston), who did us no harm at all in Committee. That cannot be said of many of his colleagues.

Sir G. Nabarro: That is an intervention from my hon. Friend the Member for Yeovil (Mr. Peyton) which is characteristic of the generosity he always displays towards his opponents.
I am not going into a sprinting competition with the Parliamentary Private Secretary. I was inquiring whether those words had been written into a Statute. So far as I am aware—I stand to be corrected later—those words, "normal circumstances" have never been written into an iron and steel Statute. They were words used as delineation by my right hon. Friend the Member for Streatham during the passage of the 1953 Bill through this House.
My second point, in connection with prices—

Mr. Marsh: The reference which I made to the right hon. Member for Streatham had nothing to do with this point at all. It was on the question of not including in this particular Clause castings and forgings.

Sir G. Nabarro: When the Minister reads HANSARD tomorrow he will find that he claimed as a precedent for his own Ministerial propriety the use of these words "normal circumstances" by my right hon. Friend. He said that they had a respectable precedent, or words to that effect. I say that they are not suitable words for inclusion in a Statute—the words "normal circumstances", which are to be found in line 6 of the new Clause—because no one understands in Britain, least of all today do they know in Britain, what "normal circumstances" means. Businessmen live on a razor-edge, so uncertain are the conditions of the immediate future. When the Minister answers I shall insist on a reply as to whether he interprets "normal circumstances" as stated capacity of the industry based on a policy of full employment.
Many of my hon. Friends, notably my hon. Friend the Member for Yeovil will recall our long struggle over the years, to get changed the arrangements for price fixing in the industry, from 1953 onwards. The Iron and Steel Board had powers, after ministerial consultation, to fix maximum prices. Once a maximum price was published, it was always the minimum price. So the minimum was the maximum. Whomsoever as a user of steel applied to a firm in the steel industry for a quotation for supplies of steel in any specification or quantity, the maximum, which was also the minimum price as published, was returned as the


tender. There was no flexibility whatever.
What does the Minister mean in the context of the new Clause by "prices"? I ask him a series of questions to which I hope he will reply. First, does he mean that the Corporation will fix maximum prices alone, so that the thoroughly bad system of maximum prices being the minimum prices and the same prices being applied over the whole field of the user and consumption of steel throughout Great Britain is perpetuated?
My second question is this. This was the purpose of my intervention, though in an intervention in the Minister's speech I did not want to state it at any great length. We on this side wish to foster the utmost competition between the 14 publicly-owned units in the industry, first, the private sector of the industry, second, and imports of steel, third. Does the Minister propose to allow each of the 14 publicly-owned companies to publish their own prices and, within the framework of a maximum price, if delineated at all by the Corporation, shall those 14 publicly-owned steel companies have full freedom to price their products at figures which best suit their own plant and their own markets in Britain and overseas?
That is what we want to know, because the price of steel dominates the prices of a very large part of British exports. It was appropriate that the industrial reporter of the Daily Sketch wrote on 30th December:
Steel prices may go up in the New Year because of the impact of the Government's squeeze policy on production costs …
Now a new warning comes from Britain's steel masters. The Steel Review—journal of the British Iron and Steel Federation—forecasts today that the industry is moving into the worse slump 'since the market chaos of the early 'thirties'.
It blames a predicted 2 million-ton output drop next year on:

1. Extra cost burdens stemming directly from the Government's squeeze which will be 'an onerous load' to carry.
2. The fact that highly capitalised steel plants will only be able to run at 70 per cent. capacity next year, involving 'significant and unavoidable increases in costs per ton of output'.
3. Fuel and energy costs kept at an artificially high level' by Government policy."

That is the Minister, again: it is his fault.
4. A jump in the industry's rate burden next year to a total of £14,750,000 (representing nearly 17s. 6d. a ton) compared with £8,500,000 (12s. 6d. a ton) in 1962–63.
The article then continues in the vein that all durable consumer goods will rise in price if basic steel prices rise.
In such circumstances the situation of today adds a great deal of force to my right hon. Friend's arguments, because if a single uniform price is imposed and impressed by the Corporation at the centre on all the 14 publicly-owned steel companies and, I presume, on the private sector—the Minister is not the kind of man to allow the private sector of industry to gain any price advantage or otherwise over the public sector; presumably he will control the lot; if I am wrong in my assumption, let him say so when he replies—this will have the effect of driving up the price of all our exports which contain ferrous metals.
I say that that is a thoroughly bad situation and that our policy should allow the maximum price freedom to all these 14 public companies to make their own prices only within the general assent of the Corporation. Here I put my last question in this section to the Minister. Does he propose to authorise the prices to be stipulated by the Corporation, or will it be the decision of the Corporation alone? Here I am on a Parliamentary point. If it is the decision of the Corporation alone, we shall be in the wretched and invidious position as Members of Parliament of seeking to table Parliamentary Questions on the contemporary price of steel and rolled and re-rolled steel products and being told by the Table, "No. This is a day-to-day commercial decision of a nationalised corporation and ultra vires the responsibility of the Minister of Power". Are the prices to be within Ministerial competence or, as the Clause says, within the competence of the Corporation alone?
I turn, finally, to imports. It is anathema to me that Britain needs to import any steel, for we are one of the major steel-producing nations of the world. However, we import a great deal of steel. I wonder whether the Minister proposes in the Clause, for it does not say so, to assume responsibility for the pricing of imported steel.
Here there is a respectable precedent. In 1955, due to the small output of the nationalised coal industry, we had to import massive tonnages of American and other coals. One year it ran to the massive figure of £80 million sterling. The then Tory Government said, "The monopoly importer will be the National Coal Board". Private enterprise was not to buy the coal in America, Europe or elsewhere, bring it in and resell it. I never understood why not, but it was not allowed to.
We import a great deal of steel. Will the Minister insist that the Corporation imports the steel in future and resells the steel at prices which the Minister impresses on the Corporation or which the Corporation impresses on itself in consonance with the price of home-produced steel; or is imported steel to be allowed genuinely to compete with the private sector's output of steel and with the output of steel from the 14 publicly-owned companies?
To put this into its correct context, let me quote from Appendix 7, United Kingdom Steel Imports, page 112 of the Benson Committee's Report, which reveals that, in 1961, 570,000 ingot tons were imported; in 1962, 970,000 ingot tons; in 1963, 1,530,000 ingot tons; in 1964, 1,980,000 ingot tons; and in 1965, 760,000 ingot tons. There are no figures yet available for 1966. The five-year average of the figures I have quoted, 1961 to 1965, shows that 1,170,000 ingot tons of steel are annually being brought into Britain, which, if I priced it at £60, £60 per ton, means an import figure of approximately £70 million sterling as the average annually, during 1961 to 1965.
What does the Minister propose to do about present imports? Will he allow the Corporation to settle prices for its 14 constituent publicly-owned companies, with or without his Ministerial guidance, and in open competition with the private sector of industry and in open competition with imported steels: or will the Minister, through his instrument, the Corporation, take powers for pricing all steel consumed in Britain?
I recognise that this Clause deals with the publication of prices, but we cannot consider publication of prices unless answers are forthcoming this afternoon to all these important and very relevant

matters which I have endeavoured to put before the House. When the Minister replies, I hope he will give, seriatim, an answer to each of the six points which I have posed to him.

5.0 p.m.

Mr. Peyton: May I say at the outset of my remarks that I hope to keep in order, Mr. Deputy Speaker, and not to be lured away from this subject. I shall do my best in that respect.
We have all listened with our accustomed admiration to the penetrating analysis given by my hon. Friend the Member for Worcestershire, South (Sir G. Nabarro). I feel that I should start by mildly rebuking him. I am sorry that the Chief Secretary has gone. When my hon. Friend uses words like "seriatim" he is placing in front of the Chief Secretary an almost irresistible temptation to wander off into mutatis mutandis, and the like, with which he regaled us during the Committee stage.
It is also fair to say to my right hon. Friend the Member for Altrincham and Sale (Mr. Barber) how very unfair he was at the start of his speech. He did not mention the previous Parliamentary Secretary whom we have lost. You. Mr. Deputy Speaker, did not have the privilege of sitting on that Standing Committee. It was a most enjoyable intellectual experience for most of us. Particularly was it studded with gleaming opportunities when we puzzled over what the devil the Parliamentary Secretary meant. It was very unfair of my right hon. Friend not to shed a passing tear at the passing of the Parliamentary Secretary.

Mr. Barber: The reason I did not refer to the erstwhile Parliamentary Secretary was that I understand that he will be coming to the House at a later stage in the debate to lend a hand, and we shall then have our opportunity.

Mr. Peyton: My right hon. Friend has done a great deal to remove the blot on his otherwise wonderful record, although it raises a point which one is bound to notice from time to time, which is that the privilege of advance knowledge always seems to be the monopoly of those who sit on the Front Bench. I say at once that no one is more worthy of that privilege than my right hon. Friend.

Mr. Nicholas Ridley: Would not my hon. Friend agree that the transference of the Parliamentary Secretary to the Ministry of Technology makes it abundantly clear that the Government have no intention of nationalising the computer industry?

Mr. Peyton: My right hon. Friend has raised a shrewd point. Whether he is right in attributing to the Government the same shrewdness that he undoubtedly possesses, I beg leave to doubt.
If I may refer with modesty and brevity to the new Clause which we are discussing, I should like to apply my mind and to invite the attention of the House to these ordinary, inoffensive and reasonable words "in normal circumstances". To find this Government talking of normal circumstances at all is in itself surprising, but to find them talking of normal circumstances in a Bill like this is obscene. I imagine that all of us have to attempt in our lame and inadequate way to try to define for ourselves what "normal circumstances" mean. I have concluded that they must mean being suspended over the very brink of catastrophe, but not yet descending into its jaws.
The right hon. Gentleman merely blinks. He does not contradict or shake his head, because by now he has become accustomed to the accuracy with which I sometimes express myself on such matters.
We should like to know what "normal circumstances" mean. I beg your pardon, Mr. Deputy Speaker—this is being intolerably optimistic—but we would like to know what the Government regard as being "normal circumstances" and what they think "normal circumstances" mean in their new Clause.
I wish particularly to support the very important point that has been made about the Corporation publishing the prices. I invite the attention of the House to what the Minister said in column 740 of the No. 1 tome which was the result of our labours. In the middle of that column he used these words:
It is my intention to consider introducing at a later stage an Amendment designed to require the Corporation and the publicly owned companies to publish their normal selling prices and their normal terms and conditions of sale of the main iron and steel

products in the United Kingdom."—OFFICIAL REPORT, Standing Committee D, 17th November, 1966; c. 740.]
I understand from those words that it was intended not merely that the Corporation should publish the price of any iron and steel product, but that the publicly-owned companies would be free, and would have put upon them a duty, to do the same. I would fear the consequences for this industry if we were to embark from this point onwards upon a centralised and single price.
I do not know what my right hon. Friend's view is on this, but it was never my feeling during the Committee stage that we were, in fact, embarked upon creating a system where we would have one price for every steel product, and I very much hope that the Minister will take the opportunity afforded him by my right hon. Friend's Amendment to make it clear that the publicly-owned companies will be free to establish their own price, that there will be full competition.
I will gladly give way to the Minister if he wishes to make it clear now that there will be full competition between publicly-owned companies, not only as to quality and delivery, but also as to price. It would be very odd if the party opposite, having for years attacked the steel industry for having no competition at all, was now to preserve forever the same state of affairs in the name of what it would undoubtedly call the public interest.
I am bound to say that the mere mention of those words leads me to repeat the hope that we will not hear too much about them in these debates, because we believe that this matter is far divorced from public interest, and that Ministerial diagnoses of public interest are nearly always very far from the truth, tinged as they are with a colossal and intolerable arrogance.

Mr. Edward M. Taylor: Is my hon. Friend aware that very great interest in the Scottish aspect of the Bill was displayed by the people of Scotland during the Committee stage? Will he add to his reputation by making it quite clear that the full and free competition he envisages does not mean an area like Scotland starting off with a handicap of very high coal prices, gas prices and electricity prices, and very high rates?

Mr. Peyton: I hope that the House will have the opportunity, Mr. Deputy Speaker, from the very beginning of our discussion of experiencing at first hand some very remarkable contributions by my hon. Friend. His knowledge of the industry, his love of Scotland, his concern for the public benefit—I nearly said the national interest—is matched only by his skill as a debater—

Mr. Barber: I intervene to point out that c. 740 of the Standing Committee proceedings reveals that my hon. Friend the Member for Yeovil (Mr. Peyton) put a question to the Minister, and I think that in fairness I ought to repeat it. He asked:
Would the right hon. Gentleman say a word about the meaningless, dangerous or otiose words 'public interest'?"—[OFFICIAL REPORT, Standing Committee D, 17th November, 1966; c. 740.]

Mr. Peyton: I am very much obliged to my right hon. Friend. It is very nice and very generous of him to call the attention of the world to a very unworthy utterance of mine. But I must not be deflected for a moment from my hon. Friend the Member for Glasgow, Cathcart (Mr. E. M. Taylor), whose skill as a debater is very remarkable, and who, in the course of a very few remarks, is able to compass enormous subjects.
It would probably be in the interests of everyone on this occasion if I followed my normal practice of self-denial and did not turn my attention to the very important question which my hon. Friend put to me on the subject of Scotland, because I really do not think that this is the appropriate moment for me to pontificate on the subject of Scottish energy prices.
I want to follow the point made on imports by my hon. Friend the Member for Worcestershire, South (Sir G. Nabarro). It is important that the Minister should take this opportunity to let us know what is in his mind on this subject. When imports come into this country, to what extent are they to be subjected to prices published by the Corporation and/or the publicly-owned companies To come back to my main point, I very much hope that it is not the Minister's intention to curtail the ability of the publicly-owned companies themselves individually to publish their own prices.

Sir Spencer Summers: I hope that it will not be regarded as any kind of intrusion if someone contributes to this part of this discussion who was not on the Standing Committee. It will not need much reflection to understand why I am thankful that I was not on it, but I appear to have missed the opportunity of that good fellowship and bonhomie which is apparent on both sides of the House in those who took part—

Sir G. Nabarro: I have nothing to do with the hon. Member for Penistone (Mr. Mendelson). I am not associating with him.

Sir S. Summers: The hon. Gentleman has not yet made his speech.

Sir G. Nabarro: He will do so in a minute, though.

Sir S. Summers: I cannot help thinking that the Minister, is deliberately, as I understand it, precluding the companies from publishing their own prices, and providing in the new Clause an obligation only on the Corporation to do so, is ignoring the realities of the situation in the steel trade. I will resist the temptation to go beyond who is to publish, and I will say nothing now about the freedom to publish different prices as opposed to uniform prices, because that is a very big subject with which there will be subsequent opportunities to deal.
What is important here is that if it is the intention that a user or buyer of steel will have only a document produced by the Corporation to study, it is bound to be out of date, and it is bound to be far too cumbersome to be practical, because it will have to deal with all the products by all the companies and any varieties that the Corporation may choose to permit in the marketing of the individual products. This highly centralised proposition must mean that the document is out of date, it must deny to the companies the very flexibility in dealing with imports which the Minister himself said was inherent in the whole situation.
I cannot understand the technical point to which he alluded, namely, that the Minister appears to have constitutional relations only with the Corporation as opposed to the companies, which will have relations with the Corporation. I cannot see why that relationship cannot be properly dealt with by permitting the


Corporation to give effect to the obligations placed upon it to publish prices by causing the companies themselves to publish the information that is here needed—

Mr. Marsh: The Clause would permit the Corporation to do that. The argument is not whether the publicly-owned companies should have the right or be able to publish these prices and terms. The argument between the Amendment and the Clause is whether or not a statutory obligation to ensure that this is done should rest with the publicly-owned companies or with the Corporation, but there is nothing in the Clause which would prevent the Corporation from requiring the publicly-owned companies to publish these figures.

5.15 p.m.

Sir S. Summers: I am grateful to the Minister, but if we are to understand that the words in the Clause
… in such manner as appears to them best adapted …
include the right to cause the publication to be done through the companies, at least it appears to be established that part of the object of the Amendment is rendered unnecessary if the Minister will say that he intends to give effect to the intent in the Clause in that particular form.
Before turning to the other part of my remarks I should, perhaps, repair an omission that I had intended to deal with earlier. It is customary that anyone with a personal interest in the topic under discussion here should reveal it. Bearing the name I do, and being a director of one of the 14 companies, perhaps it is appropriate that I should now do that but, subject to that obligation, I hope that this declaration will be enough for the next few days, as to repeat it each time would be tedious.
Reference has been made to the term "in normal circumstances". I understood the Minister to say in response to an intervention—and I hope that he is now listening, as well as writing on his paper—that he did not intend these words to imply any particular state of trade at any particular moment or any particular degree of capacity in use, but rather to permit flexibility from the published price in certain particular circumstances where a seller might deem it to be prudent. If

so, why did he not just use the word "normally"? In that blown-up form "in normal circumstances" there is introduced a whole series of considerations to which my hon. Friends have quite properly referred.
The word "normally" is something that most of us use frequently to qualify the general intention of the right to make an exception here and there. I do not know in what circumstances the right hon. Gentleman would wish to change the phrase to the word "normally", but it would please many minds if he could say that, in its final form, that will be the way in which the exceptional treatment is made permissive.

Mr. Ridley: I would like to pursue two points on this new Clause. The first relates to the vitally important matter of the Minister's decision to force the Corporation and the publicly-owned companies to publish prices. This is one of the essential safeguards for the public when dealing with the nationalised industry. All other nationalised industries, as far as I know, publish standard prices or rates for the services that they provide, and it would have been a very serious omission not to have required the Steel Corporation to do this. too.
There is a very real danger of bullying by public monopolies. A constituent of mine has received notice that because he was not prepared to agree immediately to having his telephone converted to a shared line it would be disconnected within one month. This is an intolerable example of the sort of bullying which a nationalised monopoly can do. It could happen in the steel industry if a customer were tiresome and complained, or were slow in paying or did something which was inconvenient to the Corporation or the companies.
The customer could then have a higher price levied against him for further orders, or he could be bullied in other ways. The National Steel Corporation and the publicly-owned companies will avoid—it is a self-denying ordinance and that it all that it can be—any attempt to bully a customer unreasonably as they would not have done so bad they not been in a monopoly position. It should be the rule that all publicly-owned enterprises should publish freely, for all to see, the prices of products sold by them.
The second point that I would like to touch upon deals with the question of whether it should be the publicly-owned companies or the Corporation which has the duty to publish the prices. I firmly believe that my right hon. Friend the Member for Altrincham and Sale (Mr. Barber) is absolutely right in insisting that the statuary onus should be on the company.
I take it that the prices offered will be offered ex-works. I may be wrong in this and this is one of the points which I would like to ask the right hon. Gentleman—whether he intends prices to be ex-works or to be delivered to the customer, wherever he may reside in the United Kingdom. The customer will still wish, within the monopolistic framework of the Steel Corporation, to do as much shopping around as he can. He may wish to go to the nearest steel works, because transport costs would be lower; he may wish to avoid a certain works because it does not make steel of the quality or texture which he requires. It is very important for him to be able to see the prices of each works from which he can obtain his steel. It is vital that the published prices are published from each individual steel works and are not national average prices, laid upon the industry by the Corporation.
If the Minister has a technical constitutional point, such as that the Corporation is responsible to him and that he must have power to force it and it alone to publish the prices, he should, equally write into his new Clause provision whereby the Corporation requires the publicly-owned companies to publish their individual prices. This would meet my right hon. Friend's point and if it makes the Minister happier to have it this constitutional way rather than in the way that my right hon. Friend suggests, I am sure that my right hon. Friend would agree immediately.
What should be forbidden in this Clause is the publishing by the Corporation of blanket steel prices for the whole of the 31 million tons capacity in the country. This ties up with the question of Europe. From the European point of view, the objections to this monolithic block of 31 million ton capacity coming into the market is that it will remove com-

petition and make it impossible for consumers to be able to shop around and buy their steel from the better firms, at a better price, both in terms of quality and distance from their works.
The Minister would kill two birds with one stone if he were to accept this point. He would draw a tiny bit nearer to Europe—at the moment he is on the other side of the world from it he is getting as far away from it as he possibly can—and secondly he would meet the very genuine points which my right hon. and hon. Friends have been putting to him about the need to publish prices on behalf of the works and not on behalf of the Steel Corporation as a whole. I very much urge him to accept the principle of this Amendment, even if the words are wrong.

Sir Douglas Glover: Will the Minister make a statement now which would reduce a great deal of debate on this new Clause? Would he say whether it is his intention, as it presumably is under the Clause, to cause companies to produce individual lists of prices? If it is his intention and he will make this statement, most of us will be satisfied to let the new Clause go through. If it is not his intention, then we should know very much better where we stood.

Mr. Marsh: Since the point has been raised specifically, I will, first, turn to what the new Clause does. There is nothing in it which would prevent the publicly-owned companies' figures being published. The sole objection to the Amendment, and the other way of doing it is that it is right, in my view, that these figures should be published in such a way as to ensure that they are published by a body directly answerable to Parliament and the Minister, rather than by a body only answerable to another body, or one which in this case would not be answerable to another body, because it would have statutory authority of its own and would not be responsible to the Minister for the exercise of that statutory power.
With regard to the specific question, it would be open to the Corporation either to issue a single list of prices of individual companies or for it to ask the companies to publish them. The intention of the Clause is to ensure that this information is made available. I do not know whether


it is by accident, or somehow, but there seems to have grown up a fake dispute between us. I apologise for making such a long intervention. The only reason that I do not accept the Amendment is that it would be that much more difficult to insist upon that which we both want to do.

Mr. Barber: My hon. Friend is obviously trying to be helpful and we could bring this matter to a close if we could deal with this point. My concern is that raised by my hon. Friend the Member for Yeovil (Mr. Peyton). In Committee, the Minister said:
It is my intention to consider introducing at a later stage an Amendment designed to require the Corporation and the publicly-owned companies to publish their normal selling prices …"—[OFFICIAL REPORT, Standing Committee D, 17th November, 1966; c. 740.]
This is really all that we are asking. If the Minister tells us that within the authority given to the Corporation by the Clause it is certainly his intention that the various publicly-owned companies should publish separate price lists, and that prices should not necessarily be the same, then I certainly would ask my hon. Friends not to press this any further and we could carry on with the next new Clause.

5.30 p.m.

Sir D. Glover: May I now resume my speech? I regret that I am not in the closed, charmed circle which dealt with the Bill in Committee. Therefore, perhaps from time to time I shall get out of order, because I do not know the rules of the club.
The Minister's intervention was very helpful. He clearly said that the Corporation would have the power, if it desired, to ask the companies to produce their own prices. If English means anything, that means that the price lists will be independent price lists.

Mr. Marsh: I apologise for constantly interrupting, but it is probably best to settle this point. The intention is that the prices charged for these products normally—and perhaps we can agree on what "normally" means for the moment—shall be made public. There are two ways in which to do that. First, they could be published as 14 different statements by 14 different companies. Secondly, they could be published as a

separate list with 14 headings. My dispute with the Amendment is not about the need to publish the prices; it is only about where the statutory obligation shall lie. Whether the prices will be different prices is a matter not dealt with by the new Clause. There is nothing to stop it, but it is not a matter which we are discussing.
If we are discussing only publication the intention is that the normal prices, assuming that we agree what "normal" means for the moment, should be made known, whether in one list from the Corporation with 14 headings or by 14 different companies. The dispute is not about whether the prices of the 14 companies should be made known, but whether the obligation to make the prices known should be statutorily placed on the Corporation over which the Minister has the power of hire and fire and is directly responsible to the Minister, or the publicly-owned companies over which the Minister does not have the power of hire and fire and which are not directly responsible to the Minister.

Sir D. Glover: I am making a perfectly normal speech. It will go down in HANSARD as lasting about 25 minutes, of which I shall have used two. That shows what is meant by the word "normal".
I do not think that the House is reassured by what the Minister keeps saying about what is "normal". It is, ipso facto, a fact of life that when a country has a Socialist Government it is living in an abnormal state. Therefore, the period of normalcy does not apply at that time in history. As my hon. Friend the Member for Worcestershire, South (Sir G. Nabarro) said, is 70 per cent. production normal? That is the sort of production level which will exist when the Corporation takes over. If that is what the State handed to the Corporation, presumably the Corporation would take it that that was normal. Presumably it will not reckon that it has been handed something in an abnormal state. Is 50 per cent. production normal? In other words, do the Government think that they will maintain statutory price levels with output in the industry down to perhaps 50 per cent.?
This is the sort of question the answer to which the free enterprise 10 per cent., in particular, will want to know. Will


there be a lot of scuffling in competition against them by prices bearing no relevance to basic costs because the situation is not normal? We are trying to discover what it is reasonable to consider as normal. Is it anything over 75 per cent. of production, or is it 50 per cent. of production? The Minister must have some idea about what he thinks is a period of normal conditions. The House has a right to know from the Minister, who will be dealing very closely with the Corporation, what he thinks is normal.
I come to the question of the individual prices, which has been mentioned, but only in passing. It will be a very long time indeed before the Corporation has the prestige in international markets of the individual companies. Summers and Dorman Long are household words which are known all over the world. It would be a great loss if there were a tendency to use the name of the Steel Corporation rather than the names of the companies. If the pricing structure emanates from the Corporation rather than the individual companies, it will be a move away from the identity of the individual companies. I therefore hope that the Minister, who I believe, despite his difficulties in Committee, is a fairly reasonable man, will consider that this is not another argument for the companies producing prices individually.
The Minister has the opportunity of doing something which has never been done in a nationalised industry. This is the first nationalised manufacturing industry. If the right hon. Gentleman can achieve the parallel aim which his party wishes to achieve—that is, a responsible organisation working for the people—and at the same time introduce into that organisation the element of efficiency brought about by price competition, the nation will be very grateful to him. I think that he can do it. I do not know whether it is his intention to do it.
What happens when the Corporation begins its activities will set the pattern which is likely to last for a very long time. It is, therefore, important that the Minister's decision on pricing should be right from the word "go". It will be very difficult to alter it once the system comes into operation. If he can introduce, as I think he can, a form of price competition in a nationalised industry, he will

remove one of the great arguments against nationalisation. He has the opportunity to do so under the new Clause, and I hope that he will seize it.

Sir John Eden: I agree very much with the general view expressed by my hon. Friend the Member for Ormskirk (Sir D. Glover) in his closing remarks. One of the Minister's difficulties lies chiefly in the fact that he does not know what the organisation of the industry will be. Is his problem that he has no idea what the relationship will be between the publicly-owned companies and the National Steel Corporation?

Mr. Marsh: indicated dissent.

Sir J. Eden: The Minister shakes his head. Is he therefore indicating that he has a clear vision of the future structure of the industry?

Mr. Marsh: I am merely indicating that this has nothing whatever to do with the new Clause.

Sir J. Eden: With respect, it has quite a lot to do with the Clause. If there is to be an element of competition within the new nationalised industry, there must be price competition. The 14 publicly-owned companies would then be allowed to compete among each other in price and in other terms and conditions of sale. If that is so, it must have a significant bearing on our discussion of the Clause. This is why I agree with my right hon. Friend the Member for Altrincham and Sale (Mr. Barber) that much of what we are discussing has considerable relevance to our later discussion on new Clause No. 4—Duties of Corporation and Minister relating to organisation.
I want, however, to probe a little further the comments made by way of an interjection in the speech of my hon. Friend by the Minister. Is the right hon. Gentleman saying—I have probably genuinely misunderstood him and would be grateful for clarification—that his dislike of the Amendment of my right hon. Friend the Member for Altrincham and Sale stems from the fact that it states that the Corporation
may from time to time publish
but seeks by use of the word "shall" to impose statutory obligation on the publicly-owned companies?
Is the Minister saying that his new Clause requires the National Steel Corporation to publish prices
in such manner as appears to them appropriate
and that that manner could possibly be from time to time the publication of separate price lists by the 14 publicly-owned companies? Is that what the Minister's new Clause is trying to achieve? The right hon. Gentleman appears to be going for the same objective by a different route. He is calling for the publication of prices by the National Steel Corporation and, if the Corporation so thinks fit, by the publicly-owned companies. Is this what the right hon. Gentleman is trying to achieve?
I am extremely grateful that the Minister has gone as far as he has done in bringing forward the new Clause at all. This was an undertaking which he gave in Committee. Some of my hon. Friends have said that it is fundamental in the relationship that the Corporation and the associated companies are to have with the companies outside the publicly-owned sector that the prices of the Corporation should be published. Our wish is that this should go a stage further and that there should be variation and flexibility in the prices as between the individual publicly-owned companies.
I do not see how it is possible for the Minister to be didactic here unless he can give a clear indication of what is in his mind about the future structure and organisation of the industry.

Mr. Peyton: Is not my hon. Friend being a little optimistic? Does he not remember the hours which we spent in Committee, painfully but without success, attempting to extract this information?

Sir J. Eden: Yes, I certainly recall it, and I am not in the least optimistic. I did not expect the Minister to leap to his feet and give me a thumbnail sketch of his view of the future structure of the industry, because ever since 25th October he has made it abundantly clear that he has no idea of what the industry will look like. He has no concept of its future structure. He has absolutely no idea and yet he sets out a new Clause which will hedge in, restrict and confine an essential feature of the competitive ele-

ment which should be enshrined in the future structure of the industry.
If the right hon. Gentleman has a clear idea of what the industry will be like, what is the purpose of the organising committee? What will it be engaged in? Why will we have to wait a year after vesting day before we get any concept of the future structure of the industry? [Interruption.] The Minister repeatedly shakes his head and mutters under his breath, in words loud enough for me to hear, that this has nothing to do with the new Clause. It has a direct bearing upon it, because one of the essential features of competition—I do not blame the Minister for not understanding this—is price competition.
If the prices which are to be published are published only by the National Steel Corporation, if it is only the Corporation which lays down what the prices shall be, it follows that there is to be no competition whatever in the future structure and organisation of the industry. We need a lot more clarification from the Minister.
I agree very much with the comments made by my hon. Friends on some of the expressions and phrases used in the new Clause. The Amendment of my right hon. Friend the Member for Altrincham and Sale is infinitely to be preferred. At least, it is intelligible. It says what it means. It is clear and capable of being understood, whereas the Minister's new Clause is open to all kinds of interpretations, and probably misinterpretations, which, I am certain, the right hon. Gentleman would not wish to happen. For one reason or another, therefore, I hope that my hight hon. Friend's Amendment will be accepted.
5.45 p.m.
My final point concerns the enormous range of prices which the Corporation is likely to be concerned with if it is to go across the whole range of the 14 companies' products. The Minister will agree that this would be an enormous volume comparable, perhaps, even with the HANSARD proceedings of our debates in Standing Committee.
Is it the intention that the Corporation will, for example, publish the price of electrical sheet, galvanised sheet or high-strength corrosion resistant steel? Is this the line to be pursued by the Corporation,


although it will be using many of its proprietary names which are now employed by the scheduled companies to describe their own product?
As the Minister will certainly know, the company of John Summers and Sons has a form of galvanised sheet called Galvatite, whereas the Steel Company of Wales has a form of it which is called Dragonzin. There are all kinds of descriptive labels which can be attached to virtually much the same product.
On the other hand, we might have the price of galvanised sheet but in the case of the individual companies their own particular product is what they have and are trying to sell. If they are to continue to trade as separate entities, they must continue to be allowed to identify their own product with their own trade name. Is it to be the responsibility of the Corporation to publish the price of every one of the different trade products now being manufactured by the 14 companies which are to come into public ownership? If so, it will be a massive document which will make our proceedings in Standing Committee look like a little pocket dictionary. I hope, therefore, that we will get further explanation of what the Minister has in mind.

Mr. David Webster: I speak as a newcomer to this lengthy and instructive debate. I have read many of the words which have been spoken by my hon. Friend the Member for Yeovil (Mr. Peyton) and I admired him very much during the Christmas Recess. It was a great honour to join the debate on the Clause and to contribute in a small way to it. I was glad to do so when the Minister was making concessions, for which one is grateful. The point made by my hon. Friend the Member for Bournemouth, West (Sir J. Eden) concerning the extreme complication ties in with one of my first points on the procedural aspect about how the prices will be approved.
The Minister said that prices will be approved by him and will be subject to the negative Resolution procedure. I understand that under the negative Resolution procedure it will be almost impossible for the House of Commons to examine anything as complicated as my hon. Friend the Member for Bournemouth, West has described. This makes

it impossible for the House to have any check on the fairness and flexibility of prices, which is what we on this side require.
My second point, which again concerns the negative Resolution procedure, is that since the Government have come to power I have steadily got a suspicion that functions which formerly were made operative by the affirmative Resolution procedure and which required the initiation of a debate are now to be brought in by the negative procedure, and that what previously was taken under the negative procedure is now being introduced under what, I believe, is called the interrogatory procedure. This is only a suspicion at present, but I have a very deep suspicion about it, and it is something which I should very much like to probe.
The third point is that, as one is aware. this Government are particularly inept in handling their business and are apt to spend many nights on late sittings in order to bulldoze through the House legislation dealing with highly controversial issues. As a result, they go on late at night and the opportunity to pray against such matters is limited.
Those are three reasons why I hope that my right hon. and hon. Friends will not be happy about the negative procedure.
As my right hon. Friend has said, the present Minister's predecessor, who I think is now Minister without Portfolio—certainly that is what he ought to be—or Chancellor of the Duchy of Lancaster, used to say that he would not have the basic price and freight rate type of pricing which exists within the Coal and Steel Community. It would be very sad and almost criminal if that were to be proceeded with. I hope that we shall get a statement from the Minister on what basis this type of pricing will be carried out. It is important to know that. There are certain advantages both of the maximum and the minimum laid down by the Coal and Steel Community. Above all, it is the most flexible system. It gives a definite basic price, and the customer is able to work out his own optimum method of freight rates.
If the Government mean what they are professing, it appears that we are trying


to get nearer to the European Community—[Interruption.] I am sorry that the Minister thinks it funny that we should be trying to get nearer to the European Community. If the Government mean that, they ought to do something to try to harmonise their arrangements on this and many other aspects.

Mr. Marsh: The hon. Gentleman is clearly under the impression that this Clause has something to do with pricing systems. It has not.

Mr. Webster: That is all very well, but my right hon. Friend the Member for Altrincham and Sale, like myself, is probing this point.

Mr. Michael Foot: He was as out of order as the hon. Member for Weston-super-Mare (Mr. Webster) is.

Mr. Webster: If the hon. Member for Ebbw Vale (Mr. Michael Foot) will get his feet behind the red line, he will probably be more in order.

Mr. Barber: The Minister cannot say that the Clause is not concerned with pricing systems. I asked a perfectly reasonable question which is in order and which arises out of the Clause. Under the Clause, would it be open to the National Steel Corporation to base its prices on the E.C.S. system, which is a system that, hitherto, the Government have declined to allow private enterprise industry to adopt? That is a perfectly reasonable question to ask.

Mr. Webster: I hope that the Minister will condescend to give the House an answer. It is not the Minister's function to shake his head and say that the question is not in order. If he does not try to give the House a little courtesy, he will find that difficulties are put in his path. We have been reasonable so far. We have attempted to cut short the debate. However, if that is his attitude, we know where we stand, and we shall have plenty more complicated points to raise with him—[Interruption.] I cannot hear what the former Minister of Works is saying—

Mr. Charles Pannell: The hon. Member for Weston-super-Mare (Mr. Webster) may try to raise complicated points. Unfortunately, he will not understand one of them.

Mr. Webster: I do not think that I am quite on the same level of intelligence as the right hon. Member for Leeds, West (Mr. C. Pannell). However, I am grateful for his help. He often clarifies an issue by making the most extraordinary gaffs. I hope that he will help us more often. I am sure that he will be making some contribution to our debates, particularly in view of his criticism of the Government from the moment that he left office. I hope that, with his usual candour and frankness, he will assist the House in this matter and knock some sense into his right hon. Friend.
It would be better if we went not only to the prices of the companies products but also to the prices at which they were buying their supplies. This is a wide aspect. The connection is exactly the same. One gets monolithic State-controlled bodies which, as my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) has said, can intimidate their customers. If customers complain against them or raise objections about prices, they have great powers of intimidation. The same applies to suppliers.
I hope that we in this House can protect them, because one of the greatest menaces in the increase of the public sector is that the private supplier or customer is being squeezed and intimidated, and is prevented from having the competitive prices which are necessary if the economy of the country is to flourish.

Sir Tatton Brinton: I should like to draw the attention of the House to the actual wording of the proposed Clause. The Minister has repeatedly said that the Clause deals solely with the publication of prices. Omitting certain explanatory words, subsection (1) says:
The Corporation shall from time to time publish … notices containing prices which they propose should … be charged … by them and publicly-owned companies …
The Corporation is to publish the prices which it proposes should be charged. This is an essential point. I was not a member of the Committee which considered the Bill, but I believe that the Minister is trying to put up a smokescreen when he says that this is solely a question of publication and nothing else. The Clause clearly states that the body which will


determine the prices that are to be charged is to be the Corporation itself.
Taking it a step further, who will believe that the National Steel Corporation will say, when it determines its prices, that Company A will charge so much for a certain grade of steel and that Company B will charge a different prices because it may be a more economical producer of that grade? I do not believe it. We shall have standardised national price for all companies in respect of comparable grades of steel. That is the inevitable result of a single body determining prices.
My right hon. and hon. Friends and I have put our names to this Amendment in the hope of setting up a structure which will mean that individual companies will themselves determine the prices at which they can and will sell their products profitably. Unless they do, I do not think that there will be any price competition. The form of our Amendment makes it clear that it is the Corporation which imposes the duty and it is the Corporation which is responsible to the Minister, but it is evident that the Minister wants the Corporation to determine all prices, and he wants matters so arranged that he has the final say on what they are to be. If he comes clean and says that that is his intention, at least we shall know where we stand. On the other hand, if he is prepared to accept price competition between one company and another, he must accept this Amendment or introduce some rewording of his own Clause to make it clear who will propose the prices.

Mr. R. Gresham Cooke: As another non-member of Standing Committee D—perhaps I might call myself a non-member of the D Club—I should like to press the Minister to give us a categorical statement of his pricing policy. If he does that, a lot of hon. Members on this side of the House may be satisfied.
Let me put it to the Minister two ways round. Let me put two practical problems to him. Consider, for instance, the steelmakers on the North-West Coast at Workington and Barrow. They have always had difficulty in selling their steel products, because they are far from the markets, they have high transport costs, and so on. Will they be allowed to sell

steel at lower prices than, say, the steelmakers of Sheffield or on the North-East Coast? Will they from their point of view, be allowed to sell at cheaper prices?
6.0 p.m.
Alternatively, will a customer, say the Pressed Steel Co. in Scotland, be able to go to Colville's and say, "We are working in a comparatively low-cost area. Can we buy steel from you at a cheaper rate than we have to pay John Summers?", with due respect to my hon. Friend the Member for Aylesbury (Sir S. Summers).
Those are the questions which we want answered today. What will be the policy of the Minister and of the Corporation? If the Minister does not allow these differential prices, every word uttered by the Socialists during the last 12 years about fixed prices will be absolute hypocrisy. Ever since the Restrictive Trade Practices Act of 1956 we have been told about the wickedness of price-fixing associations. We have been told of the devilry of the steel industry and other industries getting together and arranging prices between them—the hon. Member for Sheffield, Brightside (Mr. Winterbottom) told us a lot about that—and during the discussions on the Resale Prices Bill we were told that there must be competitive pricing between different firms. If the Minister today does not say that he wants competitive prices between these various companies, the Socialists will stand branded before the public as the biggest set of hypocrites who have ever presented themselves for election.
Not only do we want different prices between different companies; we want to know whether there will be different regional prices, because, as I have said, prices are different between Sheffield and Wales, the North-West Coast, and so on. There are 1,500 merchants, and 67 re-rollers. They all want to know what these prices will be. The rerollers who live near steelworks are particularly interested in the steel prices in their areas. They are not interested in national prices. They want to know what local prices will be. They also want to know whether those will be delivered prices.
That is the sort of information which they want published, and this debate could be brought to a speedy end if the


Minister said, "I shall stand by every word uttered by the Socialist Party during the last year, and there will be competitive prices. There will be no price-fixing in future, and no standardised prices. In other words, I will do what we have been urging the Conservative Party to do for the last 12 years".

Mr. R. E. Winterbottom: When I went to Sunday school, I used to sing a hymn, "Yield not to temptation for to yield is to sin". By Jove! I do not think that it is a sin any longer tonight. During the whole of my experience in this House I have never heard such a wealth of claptrap and irrelevant observation as I have heard today.
The hon. Member for Worcestershire, South (Sir G. Nabarro) started by talking about the difference in prices, or the relativity of prices, charged by national concerns compared with those charged by private ones. He also introduced the question of imports, but he forgot to talk about dumping, and so on. However, I shall let him have that for extra measure just to keep him content.
Everyone who has spoken from the benches opposite has talked about prices. There is nothing in this Clause which deals with prices.

Mr. Gresham Cooke: The hon. Gentleman should read the first four lines of the Clause:
The Corporation shall"—

Mr. Winterbottom: Publish the prices. That is all we are dealing with in the Clause, the publication of prices. According to the Clause it will be the duty of the Corporation to publish, with suitable variations, the prices of steel.
It has been explained to hon. Gentlemen opposite that the duty of the Corporation—a duty which it has to undertake because somebody must publish these prices—will not in any shape or form restrict the publication of prices by private companies which remain outside the fold of nationalisation.
Hon. Gentlemen opposite have thought fit to bring in an Amendment in the name of the right hon. Member for Altrincham and Sale (Mr. Barber)—

Sir G. Nabarro: And myself.

Mr. Winterbottom: —and the hon. Gentleman as he says, and others, which, as we used to say in Lancashire, is like a bung hole without a barrel—it means nothing. Someone has to publish the prices of steel, and to publish them in such a way that the world and the country know what prices are being charged. There is no restriction on private companies to publish their prices when they so desire, or to please themselves whether they publish prices at all. There is no guarantee that private concerns will publish prices, and we must make provision in the Bill for some authority to do so. That authority can only be the Corporation. If hon. Gentlemen opposite do not invest the Corporation with that authority, there will be no power for this to be done, unless they try to restore that which has been a complete failure in the iron and steel trade during the last 10 or 12 years. I suggest that my right hon. Friend is right in saying that prices should be published, and that this is the only logical and sensible way of doing it.
It is irrelevant and unwise for the Opposition to take up the time of the House with irrelevant trivialities by, so to speak, taking us up the garden path and showing us a beautiful crop of dandelions, all to no purpose. I think that this is one of the things which ought to be nipped in the bud before it goes too far, because I consider that some of the later Amendments will provide an opportunity to discuss things which really matter to the steel industry and to the country's economy. I think that we should do that, rather than waste the time of the House on things which are irrelevant.

Mr. John Mott: The question of pricing policy and of who publishes the prices is of fundamental importance to the whole question of the National Steel Corporation. The hon. Member for Sheffield, Brightside (Mr. Winterbottom) does not understand the implications of the new Clause and our Amendment. The new Clause provides that the Corporation should publish the prices which it proposes for steel products, and the Amendment requires the Minister to cause all the companies underlying the Corporation to publish their prices as well. We say that on every occasion every one of the underlying companies should be under an obligation to


publish the prices of its products. This is clearly very relevant to the new Clause. It is not wasting the time of the House. Pricing policy lies at the heart of the question whether or not the steel industry will compete within itself. This is a fundamental political dispute which has arisen since the Second Reading.
If we are to have a steel industry in which the Corporation publishes a uniform price for certain products throughout the industry we shall lose all the flexibility, all the competition and all the management incentive which could exist within the steel industry. That is why we press the Amendment, and consider it to be of fundamental importance.
Later on we shall deal with a Common Market new Clause, but the present one also has relevance to the Common Market. Unless the subsidiaries of the Corporation all publish, on all occasions, the price lists for their own products, they will fall outside Article 66 of the Treaty of Paris and the Corporation will be a dominant producer, as defined by that Article. It is therefore of vital importance to the debate which is to be carried on over the next three days.
Prices, above all, are the means whereby the underlying companies can compete with each other. Although questions of quality and delivery also come into the issue, prices are fundamental and there can be no competition between subsidiaries of the National Steel Corporation unless, on all occasions, they publish their prices. The Minister has not yet given a direct answer to the questions that we have put. I can understand his concern about not having a uniform price list for all products. If we consider the other nationalised industries for which his Ministry is also responsible we recognise the huge problems that arise in connection with the pricing policy of electricity, coal and gas. We accept those problems and understand them.
The fundamental difference between a nationalised steel industry and a nationalised coal, electricity or gas industry is, however, that the consumer of steel can shop around from one underlying nationalised company to another in order to find the cheapest product, whereas the consumer of gas or electricity, living in a house, cannot shop

around for his electricity or gas. If he wishes to do so he has to move his house. His only redress is to go from one fuel to another. But in the case of steel the consumers can shop around. That is why we argue that there is a fundamental difference from other nationalised industries, and that a quite different question arises in this case.
6.15 p.m.
The Minister says that he would not wish to place an obligation on companies over which he has no direct control. That is a most astonishing statement. The board of a holding company in the private sector, and its shareholders, have control over the underlying subsidiaries of that holding company. The Minister has control over the prices that the brickworks division of the National Coal Board charges to consumers of bricks. The Coal Board owns 51 per cent. of its subsidiary—J. H. Sankey and Son. Is the Minister saying that it is not his responsibility?

Mr. Marsh: If Parliament gave Sankey's statutory authority and a statutory instruction to do it, the Minister would not have control over it. That is the whole point.

Mr. Nott: We require the Minister to oblige the underlying companies to publish their prices. We say that if those prices are published we can still question the Minister on them. He is still responsible for the Corporation, which controls the underlying companies.
The hon. Member for Brightside does not understand the problem if he thinks that this discussion on the question of who publishes the prices is irrelevant to the issue. We require the Minister to say that in all circumstances the underlying subsidiaries shall publish the prices of each of their products on all occasions, and that it should not merely be an obligation upon the holding company—the National Steel Corporation—because if that happens we fear that there will be uniform prices throughout the industry and that the competition which we desire will not take place.

Mr. Michael Shaw: I wish to intervene very briefly in this full and interesting debate. I agree almost wholeheartedly with my right hon. and hon. Friends, especially about the


need for separate pricing lists for each member of groups of companies which are wholly owned by the Corporation. I want to take up one point which was raised by the Minister and another which was raised by my hon. Friend the Member for St. Ives (Mr. Nott).
The right hon. Gentleman said that these prices were to be proposed for normal circumstances, and went on to say that the price lists clearly could not be binding. Do I infer that a price list will be in the form of a recommendation, rather in the same way as recommendations are made concerning branded articles which are no longer subject to resale price maintenance? Or will companies, unless circumstances are abnormal, be forced to adhere quite strictly to the price lists?
My hon. Friend the Member for St. Ives referred to the need for price lists to be published by all the underlying companies. As I read the new Clause this just will not happen. The proposal is that the Corporation shall publish notices containing prices which it proposes should be charged in the United Kingdom by it and by the publicly-owned companies. There are other companies besides the publicly-owned ones which are in the control of the Corporation. By the terms of the Bill, publicly-owned companies are only companies wherein the Corporation, either directly or indirectly, has 100 per cent. control. None the less, there are other companies in which, directly or indirectly, the Corporation has less than 100 per cent. control but in respect of which it has power to fix prices. As the new Clause is drafted, companies not 100 per cent. owned by the Corporation will not be required to publish their prices. This could be a serious flaw in the new Clause, in that certain companies will escape the obligation to publish prices, even though they are under the control of the Corporation.
An example which I have not had time to check but which I believe is correct is that of Firth-Vickers, in which the majority of the shares will be held by the 14 companies which are to be taken over. But a part of the Firth-Vickers' shareholdings will continue to be held by a company which is not to be nationalised. Under these circumstances, therefore, the prices of the steel products of that company will not need to be

published, because the Corporation will not control all the shares in the company. I should be grateful if the right hon. Gentleman would deal with that point and say whether he has considered it and whether he does not think it advisable that the prices of these companies should be listed also.

Mr. Kenneth Lewis: I also was not a member of the Committee, though I watched it sometimes from afar and sometimes near at hand, and I was amazed, as I am sure everyone was, at the stamina shown by my hon. Friends. I do not want to extend that stamina today, so I shall be brief.
The Amendment seeks to get a little flexibility into the industry, though we are aware that we cannot get much into a nationalised industry. We are, however, doing our best. The Minister brought this Clause forward as the result of representations made to him in Committee. I believe that he has come to us with a smokescreen, because this Clause does not do what he suggests and what we should like it to do. He has not told us whether or not the companies will be able to fix their own prices. I believe that this Clause in itself—this is where I disagree with the hon. Member for Sheffield, Brightside (Mr. Winterbottom)—would influence companies towards a common price, fixed by, or at any rate under the persuasion of, the Corporation, and that we shall not see the competition of different prices from the different companies.
The Clause talks about the Corporation "proposing" the prices to be charged and the terms and conditions which should exist. This is a tight hold and not the flexible hold which the Amendment proposes; I hope, therefore, that we shall press it. What are "normal circumstances"? What are "abnormal circumstances"? These terms can be applied only to a nationalised industry. This is the incredible feature of the debate. We cannot talk about normal or abnormal circumstances in regard to free enterprise, because free enterprise has to take the circumstances as they come, and has to battle on the conditions which exist—sometimes, unhappily, under a Labour Government depressing the economic scene, or, happily, under a Conservative Government, when things are under boom.
A board of directors fixes its prices and its whole business arrangements—selling and production—on the basis of circumstances as they exist, neither normal nor abnormal. Who decides which are the abnormal circumstances? Do the separate companies decide? Does the Corporation? Does the Corporation advise the companies when circumstances are abnormal? If one company under the Corporation said, "At the moment, the circumstances are abnormal for us and we want to vary our prices," will the Corporation agree that that company should be given advantage over all the other companies in that circumstance?
Is an abnormal circumstance covered by a strike? It is not in any other industry. I am not aware that any other Minister responsible for nationalised industries has ever been given the right to tell an industry, "The situation is abnormal at the moment and therefore you can put up your prices because you have losses caused by a strike." This phrase in the Clause leaves the matter open for the Minister, the Corporation or the companies to vary prices. Furthermore, it allows them to do so without giving notice.
There is nothing in the Clause to say that, in other than normal circumstances, companies will have to give notice of a change. Presumably, they could decide tomorrow morning or next week that the circumstances are not normal. There is no phrase to suggest that they should have to give notice to their customers—British free enterprise industry as a whole, other nationalised industries, and many of our export businesses. Therefore, what they might do overnight without giving notice can have a great effect right around the British industrial scene.
The Minister has said that, if the Corporation did not have this control of prices, if the Clause did not exist, and it was left in the hands of the companies, the House of Commons would not be able to question the Minister about prices. Is he quite certain that we will be able to probe on prices even if the Corporation has this? This does not apply in any other case.
Members of Parliament have great experience of putting Questions to Minis-

ters with overall control of nationalised industries, only to be told that the Questions are not acceptable—and not because the Table Office said so. My hon. Friend the Member for Worcestershire, South (Sir G. Nabarro) mentioned the Table Office. When I go to the Table Office I know that they are not the sole adjudicators on this. They check with the Minister—

Sir G. Nabarro: The row with the Table Office is invariably about demarcation of responsibility on pricing policy, which we are here debating—whether it is Ministerial authority which determines, for example, gas or electricity tariffs, or whether it is the Board's. The difficulty arises because it is a part of each. That is why I was trying earlier to define responsibility in a Parliamentary sense as between the Minister and the Corporation.

Mr. Lewis: That clarifies the matter for me and I am grateful to my hon. Friend.
I hope that the Minister will give a categorical assurance that, when Questions are put on this matter of prices, at least we can be assured of getting an answer.

Mr. Marsh: We have debated this issue for two and a half hours, and it has been a surprising debate. This issue, as hon. Gentlemen on both sides know, is regarded by the industry and the organs of the industry as a matter of considerable importance. It is a matter which is concerned wholly and solely with publication. There are real arguments about pricing policies—I do not deny that—but this is an issue concerned with publication and one with which the industry, in the private sector and generally, is very concerned.
I hope that it will cause him no embarrassment when I say that, with the exception of the hon. Member for Aylesbury (Sir S. Summers), a large proportion of speakers opposite completely misunderstood what the new Clause and the argument is about. We have had a long debate on issues which are not part of the new Clause and are not affected by it.
6.30 p.m.
A point was raised earlier about the meaning of "normal", and this is


obviously an important part of the dispute. I tried earlier to give an explanation and said that I thought that it meant "that which normally happened", but apparently this was not sufficient. The Oxford English Dictionary defines it at some length as constituting, conforming to, not deviating or differing from, a common type or standard, regular or usual. It carries a footnote which says that the word has been in use since about 1840. Therefore, I should have thought that on the whole "normal" was a fairly normally understood word.
The hon. Member for Aylesbury raised the specific and simple point whether we are talking about normal conditions for all the prices or whether we are talking about deviations from the normal in terms of specific price changes in specific instances. The answer is that we are talking about specific deviations from the normal as distinct from the generality.
"Normal" refers to the prices which would normally be charged. The Corporation or the publicly-owned companies would be free to charge different prices in specific cases, but they could not make so many specific exceptions that the prices published were no longer those normally charged. The difference here is very clear. If the prices of the British steel industry for a certain product are X in a period of unemployment, deflation or inflation, that is the normal price, but if there is a deviation in a specific case for a specific purpose, that price is a departure from the norm. I think that we are fairly clear where we divide that.
There is a second point that I want to make clear. There are arguments about pricing policy and about the extent to which publicly-owned companies should be able to compete with each other. Leaving aside the arguments about different pricing policies, there is nothing in this new Clause which prevents or imposes any particular type of pricing policy.
What, then, were we arguing about earlier on in relation to the Amendment? On technical grounds, an hon. Member opposite made a case for the Amendment, and listed what he thought the Amendment did as opposed to the new Clause. He was wrong. All that the Amendment calls for is that
all or any of the publicly-owned companies

should
publish notices, setting out, in such form and manner as may in the judgment of the Corporation
and so on. The hon. Gentleman raised the specific analogy of the National Coal Board.
Of course a Minister has control or power over subsidiaries of organisations for which he has Parliamentary statutory authority, but if Parliament gives those organisations specific powers, as the Amendment seeks to do, that Parliamentary statutory power clearly takes precedence over the authority of the Minister. In any case, the Amendment does not call on all companies to publish the information. It says "all or any" The Amendment would be met completely if a couple of the publicly-owned companies gave some information and not all of them. I am sure that this does not meet all the desires of hon. Gentlemen opposite who have spoken. Indeed, I do not think that any of them would be satisfied with the Opposition Amendment.
Another point raised was the Ministerial power and the Corporation's power over the publicly-owned companies. It is precisely because this is important and a matter of great interest in the private sector that it should be possible for the Corporation, which is directly, statutorily responsible to the Minister, to be able to determine—the Minister is answerable to Parliament—the form of the publication. It would be completely wrong to give the 14 companies independent right, not subject to the Minister or to the Corporation, to decide what they thought was the right form.
I cannot understand how we have discussed this for two and a half hours. The whole point of the Amendment is to negate or water down many of the wishes of the private sector. The whole purpose of the new Clause—there is nothing machiavellian about it—is genuinely and simply to ensure that the lists of normal prices are available. It is asked whether they should be published in one lot, and whether that means that the Corporation will take the lot and put them altogether and then issue a figure, or whether they should be published from the individual companies. Either can be done. There is nothing to prevent this.

Sir S. Summers: It is because the right hon. Gentleman keeps on saying, "There is nothing to prevent it" that he distinguishes his point of view from ours. We wish it to be obligatory as a result of what is put in the Bill on the individual companies to publish lists.

Mr. Marsh: I am grateful to the hon. Gentleman for raising the point. I do not think that this really is the difference between us. What I want to do—it is the intention of the Clause and what the Clause does—is to ensure that the prices charged are published. The choice is not between whether a central figure is published by the Corporation or whether the individual prices of the 14 companies shall be published. The only choice is whether they shall be published in one list by the Corporation or whether they shall be published by the individual companies. The hon. Gentleman made a point in his speech with which I agree, that the reality is that one of the problems may well be that the delay in getting the figures together might be such that it would he a lone time before they were published. This is not dealt with in the Amendment, but the hon. Gentleman was not arguing the Amendment on that.
If this is so, it is a problem. But there is no reason why we cannot ensure—because the Corporation is responsible to the Minister; this is the difference between the Clause and the Amendment—that the figures are published separately. There is nothing to stop it. We merely say that we do not want to impose in a statute that it must be done in a certain way and only in that way. We want to leave the way open in order to ensure that the prices are published however it may be done, and that they are published not as the Amendment would permit, perhaps by two or three companies, but in such a form that they are all available. I genuinely believe that there is no dispute between us in terms of intention.

Sir D. Glover: If the Corporation publishes one list, the thinking behind that will be that it represents the standing price throughout the Corporation. I do not mind if the Corporation collects the figures together, with each company producing separate figures, meaning different prices.

Mr. Marsh: I was about to refer to the question of whether there should be competition between the separate companies or whether there should be one standing price. I accept that this is a big argument, although, personally, it seems pointless to take these companies into public ownership if one is then going to have free competition between them.

Sir G. Nabarro: Ah!

Mr. Marsh: We can discuss this matter on another occasion. I accept that the question of whether there should be a central list published by the Corporation or a separate list of 14 different prices, if there were 14 different prices, is an important point. This could be so if the policy decisions were such as to allow this to happen. However, I am not talking about having one amalgam of 14 prices put together, although the new Clause would not prevent them from being published in that way. The new Clause does not fix pricing policy and it contains nothing which would prevent us from entering the Common Market. I have no doubt that there will be much discussion about our entry and the connected matters that must be negotiated. The new Clause does not commit us to any type of pricing policy. Indeed, before we embarked on the Bill the industry was concerned with this whole question of pricing policy and much discussion about it had taken place. I hope I have made it clear that, whatever pricing policy is favoured, the new Clause would not prevent any policy from being adopted.
When considering whether there should be one price list or a separate list containing a number of different prices, one must remember that there might be, and probably would be, obvious advantages to steel buyers—as well as to Parliament and the Government—in having a single list of the prices being charged, rather than separate lists for each company. The hon. Member for Aylesbury made a number of points which should be taken into account. His comments were the sort of things that will have to be considered when deciding on whether to have a central list, a list from each company or, perhaps, both at the same time.

Mr. Victor Goodhew: Would the right hon. Gentleman not agree that while the wording of the new


Clause may not exactly explain what the pricing policy should he, it to some extent limits what that policy will be, because it clearly states that the prices shall be those which the Corporation proposes? If it merely said that they were the prices which the companies would charge, that would still leave the matter open, but as long as the new Clause remains unamended it must limit the form of the pricing policy.

Mr. Marsh: That is not so, because the Corporation, which is charged with making recommendations to the nationalised industry, could easily propose separate and competing price structures and, therefore, the prices which the Corporation was proposing would, in such circumstances, represent prices emerging from the structure which the Corporation proposed to set up.

Mr. Kenneth Lewis: Of course the Corporation can propose separate prices, but the companies cannot do so. The Corporation has control over the pricing system of the companies, which is a totally different matter.

Mr. Marsh: If it is being suggested that, having nationalised the industry, we should have a number of groups with complete freedom to fix whatever prices they wish, without reference to the Corporation, there would appear to be no point in having the Corporation. There is nothing to prevent the Corporation and the Minister deciding upon a competitive price system. [HON. MEMBERS: "Oh."] I am not giving an undertaking that this is Government policy, but merely pointing out that there would be nothing to prevent even that from happening.
My hon. Friend the Member for Sheffield, Brightside (Mr. Winterbottom), in one of his usual helpful speeches—all Members of the Standing Committee D Club are aware of the help readily given by my hon. Friend; I am pleased to see him looking so healthy after his recent illness—made the simple point, which I accept, that the new Clause would not preclude any such pricing structure from being arrived at.
The right hon. Member for Altrincham and Sale (Mr. Barber) asked whether the new Clause would allow the Corporation to adopt a system in line with the E.C.S.C. type of pricing system. The answer is

yes, if it wished to do so. As I pointed out, no system is precluded by the new Clause.
The hon. Member for Scarborough and Whitby (Mr. Michael Shaw) was right to suggest that this provision applies only to the Corporation and the publicly-owned companies. As he rightly said, it does not apply to companies controlled, but not wholly owned, by the Corporation. This is the case because there is a real difference between the one type of case and the other, in which category are companies which have private commercial shareholders. To impose on such companies obligations which would go far beyond the general companies law of the country could prejudice their commercial interests.
6.45 p.m.
An interesting point to remember in this connection is that, by the new Clause, we are imposing on the nationalised industry obligations which extend beyond the requirements applying to the private sector. However, I accept that there is a difference, notably because this is a different type of industry. It would be wrong to impose obligations going beyond company law on companies with private shareholders, particularly since they might be involved in diversified activities and might be obliged to divulge information which would be known to their competitors and which, as a result, would be unfair to their private shareholders.
The hon. Member for Worcestershire, South (Sir G. Nabarro) asked whether this would apply to import prices. I assure him that it applies to anything being sold by the Corporation or the publicly-owned companies. It applies to the products of either.

Sir G. Nabarro: That is a half-baked answer, particularly since that was not the question I asked. I asked about imports generally, after which I went on to give an analogy of the National Coal Board in 1955 and questioned whether the Corporation would have a monopoly of selling iron and steel imports and rolled and rerolled iron and steel products imported into this country. I gave an average figure of £60 million worth of these goods coming in every year from 1961 to 1965. If the Corporation sells them, there will be control. If the Corporation does not sell and there is a free


market, what would the Minister propose to do about that?

Mr. Marsh: That is not the issue we are discussing. Nor was my answer half-baked. I thought that I explained the matter perfectly clearly. Anything which the Corporation or the publicly-owned companies sell in the United Kingdom is covered by these provisions. The mistake which hon. Members have been making today is that they have been talking not about the new Clause but about the policies which might be associated with it.
We have had a long debate on this Clause. It is an important Clause and one that will, I think, be acceptable. It is a definite attempt by the Government to meet the requests of people with whom we have discussed the subject outside the Standing Committee. I hope that hon. and right hon. Members opposite will feel that, in the light of the explanations given, their fears were unfounded and that, as has so often been the case in the past, they tended, quite unfairly and unjustifiably, to attribute to the Government evil motives.

Mr. Barber: By leave of the House, Mr. Speaker, I ask to be allowed to make a few observations before we end this debate. If you allow a Division on our Amendment, I would seek merely to move it formally, so it might be more convenient to the House were Ito speak now. We will not seek to divide the House on the new Clause, because although in our opinion it has a number of defects, to which attention has been drawn by my hon. Friends, and although it does not go as far as we would have wished, it is, at any rate, a concession to the request that we made in Standing Committee D and the request made to the Minister by the private sector of the industry. It is not all we want, but I think that we should allow it a Second Reading without a Division.
I turn now to the Minister's reply to the points I raised when proposing the Amendment some two hours ago. First, he criticised the Amendment on a number of technical grounds. I grant him that, but I must tell him that during the 13 years when he and his party were in opposition, had we, as a Government,

particularly on Finance Bills, stood our ground on the basis that the Labour Party's Amendments were technically inaccurate, we should never have had to debate any Amendments at all.
The truth is that he knows perfectly well what the objective of our Amendment is. I hope that my hon. Friends will take it to a Division for two reasons. First of all, the right hon. Gentleman has refused to include in the Bill a provision requiring the publicly-owned companies to publish prices, though that was his intention when he spoke in the Committee. I will not waste time now by quoting again the words referred to by my hon. Friend the Member for Yeovil (Mr. Peyton), but his intention then was to do just what the Amendment seeks. For some reason that I do not understand he has now changed his mind, and has sought to brush aside lightly as being of no particular concern the Amendment I shall soon be moving.
The second reason why I think that we should take the matter to a Division is that the right hon. Gentleman has given no assurance at all that in the publication of these prices in accordance with the Clause there will be any element whatsoever of price competition between the several publicly-owned companies or groups of companies which, again, is clearly implicit in the Amendment. The truth is that after 13 years of opposition the Labour Party simply has not a clue about what it wants to do with this industry other than to nationalise it. Everyone else has a view about the prices policy they think ought to be adopted, but not the Minister, yet only a few months ago, with the industry in private hands, the Labour Government had a view about pricing policy because they threatened to legislate to allow the industry to bring in price competition.
The objective of the Amendment is perfectly clear. What is more, for all the derision he sought to pour upon it by pretending that it was nothing very different from the Clause itself, I would remind him, if he does not already know, that its substance conforms with the view of the whole of the private sector and of the 14 companies to be nationalised. That it represents the view of the whole steel industry of Britain is a factor that should be taken into account.
We on these benches are occasionally jeered at by hon. Members opposite because we appear to be the spokesmen of interests outside. I have no particular interest in the steel industry, or any steel shares, bat when the whole of the steel industry is unanimous in believing that the substance of this Amendment ought to be incorporated in the Minister's new Clause it is at least something of which he should take note.
There is much else that I could have said in answer to the right hon. Gentleman, but we want to make progress. I therefore conclude by advising my hon. and right hon. Friends not to divide the House on the new Clause but to proceed to a Division when the Amendment is moved.

Question put and agreed to.

Clause read a Second time.

Amendment proposed to the proposed Clause: In line 1, leave out from 'Corporation' to 'may' in line 8 and insert:
'may from time to time publish and shall cause all or any of the publicly-owned companies to publish notices, setting out, in such form and manner as may in the judgment of the Corporation or such publicly-owned company best inform intending buyers of iron and steel products the prices that the Corporation or such publicly-owned company will charge in the United Kingdom for iron and steel products and the terms and conditions applicable to any sale or supply of such products.
(2) The Corporation and any publicly-owned company'.x2014;[Mr. Barber.]

Question put, That the words proposed to be left out stand part of the proposed Clause:—

The House divided: Ayes 297, Noes 226.

Division No. 233.]
AYES
[6.56 p.m.


Abse, Leo
Corbet, Mrs. Freda
Gardner, Tony


Albu, Austen
Craddock, George (Bradford, S.)
Garrett, W. E.


Allaun, Frank (Salford, E.)
Crawshaw, Richard
Ginsburg, David


Alldritt, Walter
Cronin, John
Gordon Walker, Rt. Hn. P. C.


Allen, Scholefield
Crosland, Rt. Hn. Anthony
Gourlay, Harry


Anderson, Donald
Crossman, Rt. Hn. Richard
Gray, Dr, Hugh (Yarmouth)


Archer, Peter
Cullen, Mrs. Alice
Greenwood, Rt. Hn. Anthony


Armstrong, Ernest
Dalyell, Tam
Gregory, Arnold


Atkins, Ronald (Preston, N.)
Davidson, Arthur (Accrington)
Grey, Charles (Durham)


Atkinson, Norman (Tottenham)
Davies, Dr. Ernest (Stretford)
Griffiths, Rt. Hn. James (Llanelly)


Bacon, Rt. Hn. Alice
Davies, G. Elfed (Rhondda, E.)
Griffiths, Will (Exchange)


Bagier, Gordon A. T.
Davies, Harold (Leek)
Gunter, Rt. Hn. R. J.


Barnes, Michael
Davies, Robert (Cambridge)
Hale, Leslie (Oldham, W.)


Barnett, Joel
Davies, S. O. (Merthyr)
Hamilton, James (Bothwell)


Beaney, Alan
Delargy, Hugh
Hamling, William


Bellenger, Rt. Hn. F. J.
Dell, Edmund
Hannan, William


Bence, Cyril
Dempsey, James
Harrison, Walter (Wakefield)


Bennett, James (G'gow, Bridgeton)
Dewar, Donald
Hart, Mrs. Judith


Bidwell, Sydney
Diamond, Rt. Hn. John
Haseldine, Norman


Binns, John
Dickens, James
Hattersley, Roy


Bishop, E. S.
Dobson, Ray
Hazell, Bert


Blackburn, F.
Doig, Peter
Healey, Rt. Hon. Denis


Blenkinsop, Arthur
Driberg, Tom
Heffer, Eric S.


Boardman, H.
Dunn, James A.
Henig, Stanley


Booth, Albert
Dunnett, Jack
Herbison, Rt. Hn. Margaret


Boston, Terence
Dunwoody, Mrs. Gwyneth (Exeter)
Hilton, W. S.


Bottomley, Rt. Hn. Arthur
Dunwoody, Dr. John (F'th &amp; C'b'e)
Hobden, Dennis (Brighton, K'town)


Bowden, Rt. Hn. Herbert
Eadle, Alex
Hooley, Frank


Boyden, Jumes
Edelman, Maurice
Horner, John


Braddock, Mrs. E. M.
Edwards, Rt. Hn. Ness (Caerphilly)
Houghton, Rt. Hn. Douglas


Bradley, Tom
Edwards, Robert (Bilston)
Howarth, Harry (Wellingborough)


Bray, Dr. Jeremy
Edwards, William (Merioneth)
Howarth, Robert (Bolton, E.)


Brooks, Edwin
Ellis, John
Howell, Denis (Smart Heath)


Broughton, Dr. A. D, D.
English, Michael
Howie, W.


Brown, Rt. Hn. George (Belper)
Ennals, David
Hughes, Rt. Hn. Cledwyn (Anglesey)


Brown, Hugh D. (G'gow, Provan)
Ensor, David
Hughes, Hector (Aberdeen N.)


Brown, Bob(N' c' tle -upon-Tyne, W.)
Evans, Albert (Islington, S.W.)
Hughes, Roy (Newport)


Brown, R. W, (Shoreditch &amp; F'bury)
Evans, Ioan L. (Blrm'h'm, Yardley)
Hunter, Adam


Buchan, Norman
Fernyhough, E.
Hynd, John


Buchanan, Richard (G'gow, Sp'burn)
Fitt, Gerard (Belfast, W.)
Irvine, A. J. (Edge Hill)


Butter, Herbert (Hackney, C.)
Fletcher, Raymond (Ilkeston)
Jackson, Peter M. (High Peak)


Butler, Mrs. Joyce (Wood Green
Fletcher, Ted (Darlington)
Jay, Rt. Hn. Douglas


Calfaghan, Rt. Hn. James
Foley, Maurice
Jeger, George (Goole)


Cant, R. B.
Foot, Michael (Ebbw Vale)
Jenkins, Rt. Hn. Roy (Stechford)


Carmichael, Neil
Ford, Ben
Johnson, Carol (Lewisham, S.)


Chapman, Donald
Forrester, John
Johnson, James (K'ston-on-Hull, W.)


Coe, Denis
Fowler, Gerry
Jones, J. Idwal (Wrexham)


Coleman, Donald
Fraser, John (Norwood)
Kelley, Richard


Concannon, J. D.
Fraser, Rt. Hn. Tom (Hamilton)
Kenyon, Clifford


Conlan, Bernard
Freeson, Reginald
Kerr, Dr. David (W'worth, Central)



Galpern, Sir Myer
Lawson, George




Leadbitter, Ted
Newens, Stan
Silverman, Julius (Aston)


Lee, Rt. Hn. Frederick (Newton)
Oakes, Gordon
Silverman, Sydney (Nelson)


Lee, Rt. Hn. Jennie (Cannock)
Ogden, Eric
Skeffington, Arthur


Lestor, Miss Joan
O'Malley, Brian
Slater, Joseph


Lewis, Ron (Carlisle)
Oram, Albert E.
Small, William


Lomas, Kenneth
Orbach, Maurice
Snow, Julian


Loughlin, Charles
Orme, Stanley
Spriggs, Leslie


Luard, Evan
Oswald, Thomas
Steele,Thomas(Dunbartonshire, W.)


Lyon, Alexander w. (York)
Owen, Dr. David (Plymouth, S'tn)
Stonehouse, John


Lyons, Edward (Bradford, E.)
Owen, Will (Morpeth)
Strauss, Rt. Hn. G. R.


Mabon, Or. J. Dickson
Paget, R. T.
Swain, Thomas


McBride, Neil
Palmer, Arthur
Taverne, Dick


McCann, John
Pannell, Rt. Hn. Charles
Thomas, George (Cardiff, W.)


MacColl, James
Park, Trevor
Thornton, Ernest


Macdonald, A. H.
Parker, John (Dagenham)
Tinn, James


McGuire, Michael
Parkyn, Brian (Bedford)
Tomney Frank


McKay, Mrs. Margaret
Pavitt, Laurence
Tuck, Raphael


Mackenzie, Gregor (Rutherglen)
Pearson, Arthur (Pontypridd)
Urwin, T. W.


Mackie, John
Peart, Rt. Hn. Fred
Varley, Eric G.


Mackintosh, John P.
Pentland, Norman
Wainwright, Edwin (Dearne Valley)


Maclennan, Robert
Perry, Ernest G. (Battersea, S.)



MacMillan, Malcolm (Western Isles)
Perry, George H. (Nottingham, S.)
walker, Harold (Doncaster)


McMillan, Tom (Glasgow, C.)
Prentice, Rt. Hn. R. E.
Wallace, George


McNamara, J. Kevin
Price, Christopher (Perry Barr)
Watkins, David (Consett)


MacPherson, Malcolm
Price, Thomas (Westhoughton)
Watkins, Tudor (Brecon &amp; Radnor)


Mahon, Peter (Preston, S.)
Price, William (Rugby)
Weitzman, David


Mahon, Simon (Bootle)
Probert, Arthur
Wellbeloved, James


Mallalieu, E. L. (Brigg)
Randall, Harry
Whitaker, Ben


Mallalieu,J.P.W.(Huddersfield,E.)
Rankin, John
White, Mrs, Eirene


Manuel, Archie
Redhead, Edward
Whitlock, William


Mapp, Charles
Reynolds, G. W.
Wigg, Rt. Hn. George


Marquand, David
Rhodes, Geoffrey
Wilkins, w. A.


Marsh, Rt. Hn. Richard
Roberts, Albert (Normanton)



Mason, Roy
Roberts, Gwilym (Bedfordshire, S.)
Willey, Rt. Hn. Frederick


Mayhew, Christopher
Robertson, John (Paisley)
Williams, Clifford (Ahertillery)


Mendelson, J. J.
Robinson, W. O. J. (Walth'stow, E.)
Williams, Mrs. Shirley (Hitchin)


Mikardo, Ian
Rodgers, William (Stockton)
Williams, W. T. (Warrington)


Millan, Bruce
Roebuck, Roy
Willis, George (Edinburgh, E.)


Milne, Edward (Blyth)
Rogers, George (Kensington, N.)
Wilson, Rt. Hn. Harold (Huyton)


Mitchell, R. C. (S'th'pton, Test)
Ross, Rt. Hn. William
Wilson, William (Coventry, S.)


Moonman, Eric
Rowland, Christopher (Meriden)
Winnick, David


Morgan, Elystan (Cardiganshire)
Rowlands, E. (Cardiff, N.)
Winterbottom, R. E.


Morris, Alfred (Wythenshawe)
Ryan, John
Woodburn, Rt. Hn. A.


Morris, Charles R. (Openshaw)
Shaw, Arnold (Ilford, S.)
Woof, Robert


Morris, John (Aberavon)
Shinwell, Rt. Hn. E.
Wyatt, Woodrow


Moyle, Roland
Shore, Peter (Stepney)
Yates, Victor


Mulley, Rt. Hn. Frederick
Short,Rt.Hn.Edward(N'c'tle-u-Tyne)



Murray, Albert
Silkin, Rt. Hn. John (Deptford)
TELLERS FOR THE AYES:


Neal, Harold
Silkin, Hn. S. C. (Dulwich)
Mr. Alan Pitch and Mr. Joseph Harper.




NOES


Alison, Michael (Barkston Ash)
Bullus, Sir Eric
Eden, Sir John


Allason, James (Hemel) Hempstead)
Burden, F. A.
Elliot, Capt. Walter (Carshalton)


Astor, John
Campbell, Gordon
Farr, John


Atkins, Humphrey (M't'n &amp; M'd'n)
Carlisle, Mark
Fisher, Nigel


Awdry, Daniel
Carr, Rt. Hn. Robert
Fletcher-Cooke, Charles


Baker, W. H. K.
Cary, Sir Robert
Forrest, George


Balniel, Lord
Channon, H. P. G.
Fortescue, Tim


Barber, Rt. Hn. Anthony
Chichester-Clark, R.
Foster, Sir John


Batsford, Brian
Clark, Henry
Fraser,Rt.Hn.Hugh(St'fford &amp; Stone)


Beamish, Col. Sir Tufton
Clegg, Walter
Galbraith, Hn. T. G.


Bell, Ronald
Cooke, Robert
Gibson-Watt, David


Bennett, Dr. Reginald (Gos. &amp; Fhm)
Cooper-Key, Sir Neill
Giles, Rear-Adm. Morgan


Berry, Hn. Anthony
Costain, A. P.
Gilmour, Ian (Norfolk, C.)


Biffen, John
Craddock, Sir Beresford (Spetthorne)
Gilmour, Sir John (Fife, E.)


Biggs-Davison, John
Crawley, Aidan
Glover, Sir Douglas


Birch, Rt. Hn. Nigel
Crosthwaite-Eyre, Sir Oliver
Glyn, Sir Richard


Black, Sir Cyril
Crouch, David
Godber, Rt. Hn. J. B.


Blaker, Peter
Crowder, F. P.
Goodhart, Philip


Body, Richard
Cunningham, Sir Knox
Goodhew, Victor


Bossom, Sir Clive
Currie, G. B. H.
Gower, Raymond


Boyd-Carpenter, Rt. Hn. John
Dalkeith, Earl of
Grant, Anthony


Boyle, Rt. Hn. Sir Edward
Dance, James
Grant-Ferris, R.


Braine, Bernard
Davidson, James(Aberdeenshire, W.)
Gresham Cooke, R.


Brewis, John
Dean, Paul (Somerset, N.)
Grieve, Percy


Brinton, Sir Tatton
Deedes, Rt. Hn. w. F. (Ashford)
Griffiths, Eldon (Bury St. Edmunds)


Brown, Sir Edward (Bath)
Digby, Simon Wingfleld
Hall, John (Wycombe)


Bruce-Gardyne, J,
Dodds-Parker, Douglas
Hall-Davis, A. G. F.


Bryan, Paul
Doughty, Charles
Hamilton, Marquess of (Fermanagh)


Buchanan-Smith, Alick(Angus,N&amp;M)
Drayson, G. B,
Hamilton, Michael (Salisbury)


Buck, Antony (Colchester)
du Cann, Rt. Hn. Edward
Harris, Reader (Heston)







Harrison, Brian (Maldon)
Mackenzie,Alasdair(Ross&amp;Crom'ty)
Ridley, Hn. Nicholas


Harrison, Col. Sir Harwood (Eye)
Maclean, Sir Fitzroy
Ridsdale, Julian


Harvey, Sir Arthur Vere
Macmillan, Maurice (Farnham)
Roots, William


Harvie Anderson, Miss
Maddan, Martin
Rossi, Hugh (Hornsey)


Hastings, Stephen
Maginnis, John E.
Royle, Anthony


Hawkins, Paul
Marples, Rt. Hn. Ernest
Russell, Sir Ronald


Hay, John
Marten, Neil
St. John-Stevas, Norman


Heald, Rt. Hn. Sir Lionel
Maude, Angus
Sandys, Rt. Hn. D.


Heath, Rt. Hn. Edward
Maudling, Rt. Hn. Reginald
Scott, Nicholas


Heseltine, Michael
Mawby, Ray
Sharples, Richard


Higgins, Terence L.
Maxwell-Hyslop, R. J.
Shaw, Michael (Sc'b'gh &amp; Whitby)


Hill, J. E. B.
Mills, Peter (Torrington)
Sinclair, Sir George


Hirst, Geoffrey
Mills, Stratton (Belfast, N.)
Smith, John


Hobson, Rt. Hn. Sir John
Miscampbell, Norman
Stainton, Keith


Hogg, Rt. Hn. Quintin
Mitchell, David (Basingstoke)
Stodart, Anthony


Holland, Philip
Monro, Hector
Summers, Sir Spencer


Hordern, Peter
Morgan, Geraint (Denbigh)
Taylor, Sir Charles (Eastbourne)


Hornby, Richard
Morrison, Charles (Devizes)
Taylor, Frank (Moss Side)


Howell, David (Guildford)
Mott-Radclyffe, Sir Charles
Teeling, Sir William


Hunt, John
Munro-Lucas-Tooth, Sir Hugh
Temple, John M.


Hutchison, Michael Clark
Murton, Oscar
Thatcher, Mrs. Margaret


Iremonger, T. L.
Nabarro, Sir Gerald
Tilney, John


Irvine, Bryant Godman (Rye)
Neave, Airey
Turton, Rt. Hn. R. H.


Jenkin, Patrick (Woodford)
Nicholls, Sir Harmar
van Straubenzee, W. R.


Jennings, J. C. (Burton)
Nott, John
Vaughan-Morgan, Rt. Hn. sir John


Johnson Smith, G. (E. Grinstead)
Onslow, Cranley
Vickers, Dame Joan


Jones, Arthur (Northants, S.)
Orr, Capt. L. P. S.
Wainwright, Richard (Colne Valley)


Jopling, Michael
Orr-Ewing, Sir Ian
Walkker, Peter (Worcester)


Joseph, Rt. Hn. Sir Keith
Osborn, John (Hallam)
Walker-Smith, Rt. Hn. Sir Derek


Kerby, Capt. Henry
Osborne, Sir Cyril (Louth)
Wall, Patrick


Kershaw, Anthony
Page, Graham (Crosby)
Weatherill, Bernard


Kimball, Marcus
Pearson, Sir Frank (Clitheroe)
Webster, David


King, Evelyn (Dorset, S.)
Peel, John
Wells, John (Maidstone)


Kirk, Peter




Kitson, Timothy
Peyton, John
Whitelaw, Rt. Hn. William


Knight, Mrs. Jill
Pike, Miss Mervyn
Wills, Sir Gerald (Bridgwater)


Lambton, Viscount
Pink, R, Bonner
Wilson, Geoffrey (Truro)


Lancaster, Col. C. G.
Pounder, Rafton
Winstanley, Dr. M. P.


Langford-Holt, Sir John
Powell, Rt. Hn. J. Enoch
Wolrige-Gordon, Patrick


Legge-Bourke, Sir Harry
Price, David (Eastleigh)
Wood, Rt. Hn. Richard


Lewis, Kenneth (Rutland)
Prior, J. M. L.
Woodnutt, Mark


Lloyd, Ian (P'tsm'th, Langstone)
Pym, Francis
Worsley, Marcus


Lloyd, Rt. Hn. Selwyn (Wirral)
Quennell, Miss J. M.
Wylle, N. R.


Longden, Gilbert
Ramsden, Rt. Hn. James
Younger, Hn. George


Loveys, W. H.
Rawlinson, Rt. Hn. Sir Peter



McAdden, Sir Stephen
Rees-Davies, W. R.
TELLERS FOR THE NOES


MacArthur, Ian
Renton, Rt. Hn. Sir David
Mr. Jasper More and Mr. Reginald Eyre.

Clause added to the Bill.

New Clause 2.—(PUBLICATION BY COR PORATION OF INFORMATION CONCERN ING ACTIVITIES OF THEIRS AND OF PUBLICLY-OWNED COMPANIES.)

(1) The Minister may give to the Corporation directions—

(a) requiring them to compile in such form as may be specified in the directions and to publish in such manner as may be so specified such statistics and returns as may be so specified, being either statistics and returns relating to the activities of the Corporation and the publicly-owned companies or statistics and returns relating to such of those activities as may be so specified;
(b) to make in such form as may be so specified and to publish in such manner as may be so specified such forecasts as may be so specified, being either forecasts with respect to the output of the Corporation and those companies of, and their capacity to produce, iron and steel products or forecasts with respect to the output of the Corporation and those companies of, and their capacity to produce, iron and steel

products of such class as may be so specified;
and the Corporation shall give effect to any such directions.

(2) Any such directions may require statistics and returns to be compiled, and forecasts to be made, either periodically or on a specified occasion.x2014;[Mr. Freeson.]

Brought up, and read the First time.

Mr. Speaker: May I remind the House that with this Clause we are taking Amendments Nos. 90 and 89.

The Parliamentary Secretary to the Ministry of Power (Mr. Reginald Freeson): I beg to move, That the Clause be read a Second time.
Before proceeding to speak on the new Clause, I wish to thank the right hon. Member for Altrincham and Sale (Mr. Barber) for his very warm welcome. I deeply appreciate the extent to which he has gone to study my views on the political situation and the future of this country, and also the extent to which he


has circulated my views among hon. Members opposite. I am sure that will be very useful to them.
This new Clause empowers the Minister to give the Corporation specific directions about the publication of statistics, returns and forecasts. Subsection (1,a) empowers the Minister to give the Corporation directions to compile in such form as he may specify such statistics and returns as he may specify relating to the activities of the Corporation and the publicly-owned companies. It is this part of the Clause which replaces the original Clause 22(5). It goes wider than the original provision, because now under the Clause the Minister would be able to direct the compilation and publication of statistics and returns relating to all the activities of the Corporation and the publicly-owned companies, not just their principal activities as set out in Clause 22(5) in the Bill as it stands.
Under subsection (1,b) effect is given to the Minister's undertaking in Standing Committee in reply to an Amendment moved by the hon. Member for Yeovil (Mr. Peyton), which would have required the publication of the Corporation's investment programmes submitted to the Minister. For reasons which the hon. Member for Yeovil accepted, this was unacceptable, but the Minister stated that, just as the collection of forecasts of output and capacity from the private sector was required, he considered it reasonable to require the same kind of information to be produced by the nationalised sector so that it would be available to the public and to the private sector companies.

Mr. Peyton: Will the Parliamentary Secretary give the reference to the Standing Committee proceedings?

Mr. Freeson: It was on Clause 34(2), which is now Clause 36(2), and in column 2508. In that undertaking the Minister indicated that he accepted the reasonableness of requiring similar information to be provided by the nationalised sector as was originally being required to be provided by the private sector. Hence the Clause.
Subsection (1,b) applies only to iron and steel products. It would not be reasonable to require the Corporation to publish forecasts of its output and capacity to produce diversified products, in many of which it will have only a

small share of the market. Indeed, to do so might weaken its commercial position. The Corporation can be expected to participate in the general economic planning activities of the industries with which its more diversified activities are concerned.
I shall now refer to some of the salient points of Amendments Nos. 90 and 89. The Government's Amendment—No. 90—is superior, in that it makes explicit provision for information about turnover, profit or loss, and capital employed, to be given for all but the smallest acitivities of each company separately and for the Corporation and all the publicly-owned companies as a whole. The Government's Amendment also follows the Companies Bill as far as possible, enabling the Corporation and the publicly-owned companies to use for the Iron and Steel Bill information on turnover and profit which they will be preparing for the Companies Bill.

Mr. Patrick Jenkin: On a point of order. It is becoming apparent, as perhaps I should have appreciated earlier, that Amendment No. 89 standing in my name and in the names of some of my hon. Friends is more germane to Government new Clause 12 than to Government new Clause 2. It might save time if, even at this late hour, you found it possible to rule that my Amendment should be discussed with new Clause 12, because both my Amendment and that new Clause are directed to the provision of turnover, capital employed, and profit figures for the non-iron and steel activities of the Corporation.

Mr. Freeson: indicated assent.

Mr. Patrick Jenkin: I am grateful to the Parliamentary Secretary. This Clause covers in some respects a narrower field, in some respects a wider field, but at any rate a different field.

Mr. Speaker: I have no objection to that course being followed if the House has none. This seemed to us to be a natural grouping. Probably we were as much in error as the House was. It is suggested that Amendment No. 89 be discussed with new Clause 12 because the statistics and returns referred to in Amendment No. 89 are the type of statistics referred to in new Clause 12. If that is agreed, this discussion will be confined to new Clause 2, plus Government Amendment No. 90.

7.15 p.m.

Mr. Freeson: The Government Amendment is consequential on new Clause 2 or closely associated with it. We are happy that Amendment No. 89 be discussed with new Clause 12. It remains for me to make some further general observations about the Clause. It differs from the existing Clause 22(5) in that under it a duty is imposed on the Corporation only if the Minister gives a direction, whereas Clause 22(5) requires the Corporation to
compile and publish periodical statistics and returns relating to each of the principal activities of the Corporation and the publicly-owned companies
whether or not the Minister gives direction as to their form and the manner of their publication. This change has been made solely because it is desired that the power of direction be extended to cover the matters to which the statistics and returns must relate and the frequency of their publication as well as the form and the manner of their publication.
With this extension it was from a drafting point of view necessary to express the Clause in the form in which it has been set out. I can give the assurance that it will the Minister's intention to use this power of direction to require the Corporation to publish a wide range of statistics to enable Parliament and the public to be fully informed of the activities and to judge their efficiency, both here and outside the House.

Mr. Patrick Jenkin: I must first echo the welcome which my right hon. Friend the Member for Altrincham and Sale (Mr. Barber) extended to the Parliamentary Secretary. This is not the hon. Gentleman's first appearance at the Dispatch Box. He acquitted himself so well at Question Time yesterday that at least one journalist was moved to comment on the fact. May I offer one word of kindly advice to the hon. Gentleman? I advise him to consult his predecessor, and he will find that he will be well advised never on any account to write letters. They can have the most damaging consequences.
Having said that, I thank the hon. Gentleman for his helpful speech and point out, which was perhaps not entirely apparent from what he said, that both this and the next new Clause, which between them cover nearly two pages of the Notice Paper, are to replace five lines in Clause 22. If a measure were needed

of the effect and effectiveness of the lengthy debates we had in Standing Committee D, these two Government Clauses are sufficient witness.
They cover different points, as you, Mr. Speaker, were kind to recognise in response to my intervention, this Clause dealing with statistics, returns and forecasts, and new Clause 12 dealing with the question of the figures relating to the diversified activities of the Corporation and of the publicly-owned companies. Both these Clauses and the Amendment tabled by the Government to Clause 22 dealing with the acounts of the Corporation represent a quite significant advance in the Government's thinking on the whole question of the provision of figures and information about the activities of a nationalised industry.
At an early stage in Committee, and from our side of the Committee throughout the Committee stage, the Bill was frequently criticised for being no more than a rehash of the Bill introduced in 1948 by the then Labour Government. These criticisms did not come solely from the Opposition. The hon. Member for Poplar (Mr. Mikardo) was active in the Committee, I am glad to say, and the hon. Member for Ebbw Vale (Mr. Michael Foot) may take comfort that his point of view was adequately represented by the hon. Gentleman. The hon. Member for Poplar said, during an early stage of the debates:
Here the Minister comes along with a Bill which for all practical purposes is the copy of the Bill of nearly 20 years ago. I am bound to say I am deeply disappointed."—[OFFICIAL REPORT, Standing Committee D, 3rd November, 1966; c. 241.]
That is a critticism which we have made, and it is criticism which in some respects the Government have reacted to and from which they have moved forward.
The accounts of the nationalised industries have been criticised as being lacking in necessary information. In some cases and in some areas the criticism has been that it is almost as if the information were intended to be concealed. Of course, one would swiftly absolve the chairmen and members of these corporations from doing any such thing, but the fact remains that this criticism has been made, and I am bound to say that it has some justification.
The Bill as originally drafted, and as presented to the House last July, made


very little advance on anything which had gone before. As a result, we found it necessary in Committee, on Amendments and new Clauses, to probe and demand that more information should be given: and furthermore, that the information should be given in a more meaningful form from which proper deductions could be made.
Allied to this, we insisted that where information was to be required from the private sector, and certainly where it was to be made use of, the Corporation should not be entitled to acquire information from private companies which could be of commercial value to it. Obviously the Corporation, with 90 per cent. of the iron and steel trade, will be competing with the private sector, and it should not have access to this information. The new Clause, which we welcome, represents the first instalment of the undertakings to which the Parliamentary Secretary referred and which were given at various stages during the Committee sittings.
Although we welcome the new Clause, it is right that we should raise a number of points about it and should ask questions. The Parliamentary Secretary pointed out that in some respects the Clause went wider than Clause 22(5) which it in part replaces. In that respect he is quite right. We must point out that in another important respect the new Clause represents a weakening of the position. Clause 22(5), which deals with the publication of statistics and returns, starts off by saying:
The Corporation shall compile and publish periodical statistics and returns relating to each of the principal activities …".
In the new Clause that has been watered down to the words
The Minister may give to the Corporation the directions—
(a) requiring them to compile …".
Thus, in this narrow but important sphere of the Corporation's activities, we have a substitution of a Ministerial discretion for a statutory duty.
The Parliamentary Secretary went out of his way to say that it was the Government's intention that the power to give directions should be used widely, and for that we thank him. I draw the attention of the House to the valuable publication, the annual statistics—I happen to have the statistics for the year 1965, which is

the most recent year for which statistics have been published—published jointly by the Iron and Steel Board and the British Iron and Steel Federation. There are nearly 170 pages of statistical information about the iron and steel industry, about its products, about its consumption of raw material, about its manpower, and about everything else.
I hope the Parliamentary Secretary will be able to indicate that it is the Government's intention, at any rate at present, that the statistics be published, and that the directions given in this Clause with regard to the publication of statistics will be an adequate successor to this volume. As the Iron and Steel Board is disappearing and the Federation will become a different animal, it is unlikely that the previous publication will be produced by them in future.
If the Parliamentary Secretary can say that this is the level of statistical information which the Government envisage, then it would go a long way to meeting the criticism on this side of the House that we are now dealing with a Ministerial discretion and not with what was originally a statutory duty.
The Clause as now drafted gives the Minister power to exclude certain activities from the duty to give statistics. Subsection (1,a), makes it clear that these statistics and returns extend to all the activities of the Corporation, that is to say, not only to its iron and steel activities, but also to its diversified activities. If this exclusion is to operate, we want some idea of how it will be done and of the circumstances under which the Minister is likely to want to exclude certain activities. He can give directions so that the obligation to publish statistics can extend to only some and not all of the activities. On what principle will the Minister exercise this discretion?
Subsection (1,b) deals with forecasts. This now relates only to iron and steel products, and it is quite right that it should. It would be really intolerable if the Corporation were to publish forecasts for its other diversified activities, in a great many of which it will be in competition with a large number of other industries.
Here again, it is quite clear that the Corporation can give forecasts only of its


own investment, of its own output, because the Corporation, competing with the private sector, cannot acquire information, and it must not be allowed to acquire information, from the private sector which would enable it to compile forecasts of capacity and output for the whole industry.
One must recognise, and the Government have recognised this, that it will represent a departure from what the Iron and Steel Board has been able to do—the Iron and Steel Board standing, as it were, apart from any of the companies in the industry, where the nationalised Richard Thomas and Baldwins or the remainder of the present private sector could in confidence collect statistics from all of them and could compile them into forecasts for the whole of the industry.
The Government have recognised this point and we welcome this. It is one of the most essential safeguards for the viability and health of the private sector that these forecasts as published here will relate only to the Corporation and to the publicly-owned companies. It would be helpful if the Parliamentary Secretary could repeat what the Minister said in Committee. More publicity is given if these things are said on the Floor of the House, and it would help if he repeated the Minister's assurance.
The Minister may ask the private sector for a forecast of investment and output. Naturally, there will be some suspicion in some quarters that the statutory Corporation, being as it were the Minister's creature, could come into possession of information which the private sector would be under statutory duty to provide under Clause 36. I am quite sure it would be valuable to the industry, and for the confidence which the industry must have in its own future viability, if the Parliamentary Secretary were to give a categorical assurance that in no circumstances will commercially valuable information be made available to the Corporation. This is an assurance which the Minister gave in Committee, and it would be helpful if it could be repeated.
The new Clause represents two steps forward and one back, and I refer to the substitution of Ministerial discretion. For that reason, although we greet it with some welcome, our raptures must be modified on that account. However,

subject to anything which my hon. Friends may wish to say, I see no reason why we should not let the new Clause go through without a Division.

7.30 p.m.

Mr. Peyton: I should like to associate myself with the welcome which has been given to the new Clause by my hon. Friend the Member for Wanstead and Woodford (Mr. Patrick Jenkin) and to say to the Parliamentary Secretary how glad I am that his first speech on the Bill from the Dispatch Box should be in the process of more or less fulfilling a promise made by the Minister to me during the proceedings of the Standing Committee.
It was in the last death throes of that Committee that the Minister gave this undertaking:
Accordingly, it is my intention to introduce on Report an Amendment which would require the Corporation to publish periodical forecasts about the nationalised sector's output of, and capacity to produce, iron and steel products ".—[OFFICIAL REPORT, Standing Committee D, 15th December, 1966; c. 2508.]
I do not think that I am being unduly legalistic when I say that, I am sure unintentionally, the Minister has fallen a little short of that, because the new Clause is not a requirement. It gives the Minister a discretion to impose a requirement. It would be tiresome and tedious if I went at length again into my views about Ministerial discretion.
We have learned to appreciate that the right hon. Gentleman is not a man without virtue, that he is a man whose word can be trusted. Indeed, we ended the Committee stage by quite liking him. But we know that on the Government benches there are those for whom we would not care at all and in whose word we would put but little trust. I therefore do not at all like the idea of Ministerial discretion, because there might be a Minister who would not feel it necessary, as the right hon. Gentleman would, to issue such a direction as is here envisaged.
I very much hope that the right hon. Gentleman will both seriously study the promise which he gave and which is on record and which I have faithfully quoted and ask himself the straight question whether the new Clause meets his promise. I do not think that it does. This is a permissive power which the Minister may give the Corporation and


is considerably short of what I hoped would be done.
The actual wording of the new Clause leaves the Minister a great deal of discretion. Having decided that it would be a good thing to give directions to the Corporation, he is left to specify the form and manner of the statistics and returns which are to be required and the activities covered by those statistics and returns.
Taken as a whole, the new Clause falls a very long way short of what the Minister undertook to do. I do not want to prolong discussion, but I hope that the right hon. Gentleman will have second thoughts and consider very seriously whether he should not strengthen the new Clause and make it measure up to his undertaking.

Mr. Kenneth Lewis: I, too, am rather surprised that the Minister has not laid an obligation on the Corporation and its member companies through the Corporation to provide statistics in this way, because I think that he will find that there will be an obligation upon him and on the Corporation because of other Acts and through other Ministries to demand certain statistics.
My hon. Friend the Member for Wanstead and Woodford (Mr. Patrick Jenkin) said that the statistical record of the industry was very good. The booklet on statistics which he mentioned and which is provided by the Iron and Steel Board and the Federation together gives very full statistics, within the prudence of any industry which must not provide statistics which could be helpful to its competitors. It is always difficult for any federation or trade association collecting statistics to know what to publish and what not to publish, because it often finds that if it publishes certain figures it does not get them again and that constituent firms make it clear that they do not provide statistics to any federation or trade association in order to damage their competitive ability in the market. The Minister will have to bear this in mind with the nationalised industry just as much as private industries have to, because the nationalised industry will be competitive overseas.
Nevertheless, I hope that as much as possible about the industry will be published. Industry generally in this country has probably fallen short in its ability to collect the right kind of statistics and make them available to Government Departments and federations so that a proper picture can be obtained of what various industries are doing. This was clear with the National Plan, and I think that the Government themselves made a mistake when they produced the National Plan and had to make too many cock-shies. They could not get the proper statistics and so they made a guess. That is where the National Plan foundered, and I do not think that we are in a stronger position today than we were when the Plan was published.
However, events are on the move and things are improving. I sat on the fourth Committee of the Estimates Committee which discussed this whole question, particularly Government statistics, and we got a picture at any rate of what British industry was trying to do. There have been great improvements in recent years in this respect and the iron and steel industry has contributed to that improvement.
In the new Clause the Minister might have included a provision about bringing the collection of statistics up to date through the use of modern methods. It might not be appropriate to include that in the new Clause, but I hope that it will be borne in mind. Perhaps the industry should be provided with a computer to compile statistics, as is now becoming a common practice. This is helpful in that it saves staff and provides statistics much more quickly and I hope that very soon we shall find the Corporation itself purchasing a computer for use in the collection of statistics.
In particular there is a shortage of statistical information about manpower. Government Departments concerned find great difficulty at times because they cannot get the divisions of work among people in various industries. I do not know whether that applies to the iron and steel industry, but it is a matter to be considered, because the ability to train and retrain people can be improved and the value of the new training legislation, which we introduced, can be gained in full measure only if we have the right kind of statistics and know what people


are doing and so know exactly where they are.
There is some advantage in the Minister discussing with the Central Statistical Office the kind of uniform collection of statistics which it is seeking to provide. It is no good the Corporation setting up a system of statistical collection which does not follow the general pattern in Government, through the Treasury, and particularly through the C.S.O. At present various companies presumably have people, some qualified and some not qualified, to deal with statistics. The Federation will have its own staffs and so will the Board, and I hope that the Minister will make the best use of the staffs by bringing those best qualified together at the centre.
I have never taken the view that a statistical department needs to be composed entirely of people who are qualified statisticians, but one needs one or two qualified people at the top who can guide and make use of the figures. One can collect all of the statistics in the world, but if one does not know what to do with them, if one cannot measure the information given and make use of them to help in making forecasts, then the collection has been in vain. It is the best use of qualified people in the collection of statistics together with the provision of the best equipment and the introduction of a computer, which will enable the Corporation and its various companies to improve their activities. I support the new Clause.

Mr. Michael Alison: Like my hon. and right hon. Friends, I welcome the step which the Minister has taken to implement undertakings given in Committee. I would like to ask a couple of questions about the new Clause. Do the Government envisage that the Ministry of Power or the National Steel Corporation or the publicly-owned companies will be the collecting agencies for the variety of statistics required by the Central Statistical Office, the Ministry of Labour, the Board of Trade and the Ministry of Power for a number of different purposes?
This is an important question, because we want to know whether the Government have a view on this. If the Ministry of Power is not to be a collecting agency we want to know just who is.

It has been established, particularly in the deliberations of the Select Committee on Estimates, which looked into Government statistical services, that there is a good deal of overlapping in the collection of statistics and that there is an enormous amount of work involved for particular firms at firm level in the collection of statistics.
7.45 p.m.
If the Ministry of Power is to be the collecting agency for the industry as a whole it is obviously quite unsatisfactory that this Clause in its present form should be permissive rather than mandatory. One can only draw the conclusion that the Ministry of Power has decided that whoever is to be the collecting agency it will not be the Ministry, otherwise it would have been bound to make the terms of the Clause mandatory. We would like some information as to what is the work which will be involved for the firms or the Corporation, and which of them will be doing the work of collecting these extra statistics for which this permissive Clause has been introduced?
Can the Parliamentary Secretary say something on the question of forecasting? I am a little uneasy about the the rather uncertain provisions of subsection (b) of this Clause. The whole question of forecasting is different when dealing with large sectors of industry. One of the most curious features of the National Plan was the division in the Plan of the Government's view of the future and in the second part of the Plan, dealing with what might be called the forecast of industry once found a very substantial divergence of view between, say, the electricity generating industry about the likely demand for capital or electricity and the view taken by the Ministry of Power.
There was a particular example in the activities of the Coal Board, when the Board, talking about coal exports, forecast an export target of exactly double the Government's forecast. Is there duplication in this matter? Is the Minister of Power to make his own assessment of the output of particular products and the industry as a whole, which will be set against the forecast of the industry, or will these be the sole source of statistical forecasting for the whole of the steel sector which the Ministry of Power will simply take as read?


We need this point elaborated, because although the new Clause is very welcome, it is in a permissive rather than mandatory form, and we want to know to what extent the Ministry will have its own sources, and to what extent there will be duplication, and whether there will really be some basis of comparison, particularly in forecasting, between what the Government think is likely to happen and what the industry really thinks.

Mr. Freeson: A number of points have been put to me for further information. It is good to have the agreement of both sides of the House on such a major improvement in the propagation of information. I have always held the view that one of the many merits of public ownership was the fact that it brought industries, such as the steel industry and service industries, under much greater public scrutiny by Parliament and the country than can be the case when large sectors of major industries remain in private hands. This is a personal view which I think is held by quite a number of other people.
I wish to answer the points put to me by the hon. Member for Wanstead and Woodford (Mr. Patrick Jenkin), the hon. Member for Rutland and Stamford (Mr. Kenneth Lewis) and by the hon. Member for Barkston Ash (Mr. Alison). The statistics for the whole industry, which were referred to by the hon. Member for Wanstead and Woodford in the publications of the Iron and Steel Federation and the Iron and Steel Board, will be published by the Ministry and discussions are now going on between the Ministry, the Federation, the Iron and Steel Board and the Organising Committee as to the arrangements by which this type of publication will continue.

Mr. Patrick Jenkin: I would like the hon. Gentleman to deal with the question of to what extent there is likely to be a duplication of the statistics published by the Ministry which he has described and the statistics required by the new Clause. I recognise that the Corporation has only its own activities, but is there not a danger of duplication? I had not appreciated that this was the Minister's intention.

Mr. Freeson: In a sense I covered this point when I referred to the discussions as to the arrangements for the publication of statistics. It is a point to be watched. We hope to clarify matters on this, when our discussions are completed.
Either the hon. Member for Yeovil or the hon. Member for Rutland and Stamford asked about the principles on which the directions will be given by the Minister. It is not a question of principle except in so far as that we shall have published as wide a range of information as possible. Only very minor activities will be excluded from the published information. I can give an assurance about the divulgence of information obtained in confidence from the private to the nationalised sector. It would not be the intention to pass on this information except with the full permission of the private sector.
The hon. Member for Rutland and Stamford made a point about modern methods. It would not be appropriate to deal with it in the Bill, but we are very much concerned with it. We certainly take the point. We shall encourage the Corporation and others—this is true in a wide range of industry with which various Government Departments are concerning themselves—to adopt much more modern methods of statistical collation, research and administration on a whole range of activities with which they are concerned.
A very fair point was made about forecasting, especially bearing in mind the variations which existed in the first edition of the National Plan. So much is this point taken by the Department that we are undertaking a very thorough fuel policy review which has this aspect of forecasting energy requirements very much in mind. The same principle will be adopted regarding the various sectors of the steel industry. This is one of the opportunities which the Department will have rather more effectively than in the past with the nationalisation of the industry. The hon. Gentleman referred to overlapping and contrary figures, as he put it, which were produced in the past and asked how we would avoid this in future. On the energy side, we are doing this by the policy review. We shall seek to undertake this kind of major continuous review in the steel industry.
I believe that I have dealt with all the specific points.

Mr. Allison: The hon. Gentleman has not touched on one point which I made, namely, who is responsible for acting as the collecting agent for the various specialised figures at present collected by the Board of Trade and the Ministry of Labour?

Mr. Freeson: I dealt with that to some extent in my reference to the arrangements being discussed. The collation of information will be a matter essentially for the Ministry. How it will be undertaken is being discussed.

Mr. Alison: Then is it appropriate that the new Clause should have this permissive wording:
The Minister may give to the Corporation directions",
because he is bound to give the Corporation directions. The original provision in the Bill which the new Clause replaces was mandatory as opposed to permissive.

Mr. Freeson: The hon. Gentleman will appreciate my difficulty. I am a new member of the club. I am assured that that is entirely a drafting matter and is not to be taken as any intention to reduce the kind of information which will be required. As I have said, only the most minor activities will be excluded. This is the intention of the Clause.
I have dealt with all the points which were put specifically to me—

Mr. Peyton: I am sorry that I was not here when the hon. Gentleman began his speech. I wish to press him on this point, because it does not seem to me that the clear undertaking given by the Minister is being fulfilled. The Minister made it clear that there would be a mandatory requirement. All that the new Clause provides is that discretion is conferred on the Minister. I do not think that that is adequate. If the Parliamentary Secretary had been a member of the Committee, he would have listened painstakingly, as the Minister did, to frequent and justified statements by the Opposition that we did not accept Ministerial discretion as being adequate.

Mr. Freeson: With all due respect, the hon. Gentleman is making heavy weather

of this. I have the relevant quotations from the OFFICIAL REPORT of the Standing Committee's proceedings. The sentence attributed to my right hon. Friend was:
Accordingly, it is my intention to introduce on Report an Amendment which would require the Corporation to publish periodical forecasts about the nationalised sector's output of, and capacity to produce, iron and steel products."—[OFFICIAL REPORT, Standing Committee D, 15th December 1966; c. 2508.]
The fact that the word is "may" does not mean that the Minister will not use his power to require the information to be published. However, may I say without commitment that this is something which we can consider again, and we undertake to do that.

Sir Harmar Nicholls: The detailed point which I had in mind has been made, but comment should be made on the opening words of the Parliamentary Secretary. He ventured to put on record his belief that when an industry is nationalised it gets keener Parliamentary scrutiny and greater publicity. I do not think that that is true. If one looks at the record since 1946, HANSARD is positively littered with attempts to ask Questions about a nationalised industry and, because the statutory power has not been vested in the Minister, we have had no answer. Private industry comes under the auspices of the Board of Trade or the Chancellor of the Exchequer and it is always possible at Question time to probe matters. We should not allow the Parliamentary Secretary to get away with the suggestion that one of the supposed advantages and virtues of this piece of nationalisation is that we shall know all about the industry concerned.
So that it is not suggested that I might be sounding pompous, if I may say to the Parliamentary Secretary, in Committee or during the Report stage, it is always bad to introduce generalities of this sort. I came into the Chamber to listen to the debate because I was interested in one point. When one introduces a generality which has no scientific basis, one is asking Parliament to go on talking about it, as I have done for the last three minutes.

Mr. Peyton: The Parliamentary Secretary rather wrongly and unjustifiably accused me of making heavy weather of this point. He then went on to say that he would undertake, without commitment,


to consider it again. In other words, he accepts that there is something in the point.
Looking back over the years, when we were on the benches opposite, I wonder what would have been the reaction of the Socialist Opposition had a Conservative Minister given a clear undertaking of the kind given by the Minister and then produced a merely permissive Amendment such as this. It might well be that not the present Minister, because we know his intentions, but another Minister would say, "I do not mean to exercise this power", and then the whole of this exercise would be rendered nugatory.
The Minister gave a clear and specific undertaking. It is obvious that the new Clause goes no more than halfway to meeting that undertaking. We do not wish to make charges about Ministers falling down on their promises, but we are more than entitled to press the Minister and to invite him to say that he will undertake to table a new Clause in another place which will fully meet the point which he fairly promised to meet in Standing Committee.

New Clause No. 12.—(INFORMATION RESPECTING CERTAIN CLASSES OF BUSINESS OF CORPORATION AND PUBLICLY-OWNED COMPANIES TO BE CONTAINED IN COR PORATION'S REPORT TO MINISTER.)

5
(1) If a body in the group consisting of the Corporation and the publicly-owned companies has, in the course of a financial year of the body ending after such date as the Minister may determine for the purposes of this subsection, carried on business of a kind to which this section applies, or business of that kind of two or more classes that differ substantially from each other, the Corporation shall determine the amount of the turnover of the body for that financial year in respect of business of that kind or, as the case may be, of each of those classes; and if the amount of turnover in respect of that business, or, as the case may be, of any of those classes, is determined by the Corporation to have exceeded £250,000, there shall be contained, if the body is the Corporation, in the report which, by section 4(6) of the 1949 Act, they are required to make next after the end of that financial year, or, if the body is a publicly-owned company, in the report which the Corporation are by that section required to make next after the end of the financial year of the Corporation with or within which the first-mentioned financial year ends, a statement of—


10


15
(a) that amount;



(b) the extent, or approximate extent, (expressed in either case in monetary terms) to which, as so determined, the carrying on of business of that kind or, as the case may be, of that class by the body contributed to, or restricted, the profit or loss of the body for the financial year of the body before taxation;


20
(c) the extent, or approximate extent, to which, as so determined, capital moneys were, in the course of that financial year, employed in the carrying on by the body of business of that kind, or as the case may be, that class; and


25
(d) such further information, if any, relating to the carrying on by the body of business of that kind or, as the case may be, that class, as the Minister may from time to time direct.


30
(2) If, in the course of a financial year of the Corporation ending after such date as the Minister may determine for the purposes of this subsection, any two or more bodies in the group consisting of the Corporation and the publicly-owned companies have carried on business of a kind to which this section applies, or business of that kind of two or more classes that differ substantially from each other, the Corporation

Mr. Freeson: I thought that I put my words rather gently. I did not expect that there would be such a passionate reaction to them. I undertook to consider the matter again. I cannot go further than that.
On the general observations made by the hon. Member for—I cannot remember his constituency for the moment—

Sir Harmar Nicholls: Peterborough.

Mr. Freeson: I should have remembered that one. The right hon. Gentleman chided me for making a general observation very briefly—much more briefly than he made his general observation. I suggest that he turns round and faces his own benches—or he should have done so earlier this evening. It is a very long time since the iron and steel industry was subjected to the public scrutiny to which is has been subjected in this place and in Committee in recent months.

Question put and agreed to.

Clause read a Second time and added to the Bill.

35
shall determine the amount of the turnover for that financial year of the said bodies as a whole in respect of business of that kind, or as the case may be, each of those classes; and if the amount of that turnover in respect of business of that kind or, as the case may be, any of those classes, is determined by the Corporation to have exceeded £1,000,000, there shall be contained in the report which, by section 4(6) of the 1949 Act, the Corporation are required to make after the end of that financial year, a statement of—



(a) that amount;


40
(b) the extent, or approximate extent (expressed in either case in monetary terms) to which, as so determined, the carrying on by the said bodies of business of that kind or, as the case may be, that class contributed to, or restricted, the profit or loss of the Corporation and the publicly-owned companies as a whole for that financial year;


45
(c) the extent, or approximate extent, to which, as so determined, capital moneys were, in the course of that year, employed in the carrying on by the said bodies as a whole of business of that kind, as the case may be, that class;



(d) such further information, if any, relating to the carrying on by the said bodies of business of that kind, or, as the case may be, that class as the Minister may from time to time direct.


50
(3) Each report made by the Corporation under the said section 3(6) after they are required to make a determination in pursuance of a subsection above shall contain a statement of the method, or if more than one method is used, of each method, by which turnover is determined by the Corporation for the purposes of that subsection; and in any such report containing a statement made in pursuance of that subsection, there shall be stated with respect to each matter involving a determination by the Corporation (other than the determination of an amount of turnover) the method by which that determination is arrived at.


55


60
(4) The method used in arriving at a determination in any case for purposes of paragraph (c) of subsection (1) above and that used in arriving at a determination in any case for purposes of paragraph (c) of subsection (2) above shall be such as, when examined in conjunction with the determination made in the first mentioned case in pursuance of paragraph (b) of the said subsection (1) and that made in the second mentioned case in pursuance of paragraph (b) of the said subsection (2) respectively, will give a true and fair view of the relationship in the first mentioned case and the second mentioned case respectively between capital employed and profits made or loss incurred.


65
(5) The Corporation shall not be required by virtue of this section, to furnish information which is furnished in any statement, note, account or report which, in pursuance of sect ion 22(3) of this Act, the Corporation have sent to the Minister, or in any statistics or return published in pursuance of a direction given under section (Publication by Corporation of information concerning activities of theirs and of publicly-owned com panics) of this Act.


70



(6) This section applies to business consisting wholly or mainly in activities not being iron or steel activities, and for the purposes of this section, classes of business that do not differ substantially from each other shall be treated as one class.


75
(7) The Minister may from time to time direct that this section or a provision thereof shall not apply to business of a class or description specified in the direction; and if the Minister gives a direction under this subsection, that fact, and the class or description of business to which the direction relates shall be stated in each report made under the said section 4(6) so long as that direction is in force.


80
(8) The Minister may from time to time vary the amount by reference to which it is to be determined, under subsection (1) or (2) above, whether a statement to be contained in a report made under the said section 4(6), and may fix different amounts under this subsection for different purposes.—[Mr. Marsh.]

Brought up, and read the First tune.

8.0 p.m.

Mr. Marsh: I beg to move, That the Clause be read a Second time.

Mr. Deputy Speaker (Mr. Sydney Irving): With the new Clause, we may take the six Amendments thereto, in the name of the right hon. Member for Altrincham and Sale (Mr. Barber) and other hon. Members.

In line 2, leave out from 'ending' to 'carried' in line 3 and insert:
'more than twelve months after vesting day';

In line 9, leave out '£250,000' and insert '£100,000';

In line 34, leave out '£1,000,000' and insert '£250,000';

In line 56, at end insert:
'and in the case of capital moneys employed there shall be stated, where appropriate, in addition to the amounts arrived at by the


methods required to be stated as aforesaid, the approximate replacement values of any assets represented by the amount of such capital moneys employed';

In line 74, leave out subsection (7); and

In line 79, leave out subsection (8); and Amendment No. 89, in the name of the hon. Member for Wanstead and Woodford (Mr. Patrick Jenkin) and other hon. Members, in Clause 22, page 21, line 27, leave out subsection (5) and insert:
(5) The Corporation shall compile and publish periodical statistics and returns relating to each of the principal activities of the Corporation and the publicly-owned companies and if any such activity is not an iron and steel activity such statistics and returns shall be compiled and published in each financial year and shall include a statement of the turnover, of the capital employed in and of the profit of or (as the case may be) the loss incurred in any such activity during the previous year. Subject thereto the Minister may give directions to the Corporation as to the form of those returns and the manner of publication.
(6) For the purposes of subsection 5 of this section:—
'turnover' shall mean the invoiced value of all goods and services sold after the deduction of indirect taxes;
'the capital employed' shall be the aggregate of the following amounts—

(a) the value of all fixed assets used in such activity calculated as provided in the 8th Schedule to the Companies Act 1948 or any provision for the time being in force amending or re-enacting the same or, if any fixed asset is used in that activity and some other activity, a proportionate part of the value thereof according to its use in such activity. The method of calculating the amounts written off for depreciation obsolescence or otherwise shall be stated;
(b) the working capital employed in such activity which shall for this purpose be the cash in hand and the amount of outstanding debtors less current liabilities at the end of each financial year;
'the profit of' or as the case may be 'the loss incurred in' such activity shall he calculated after deducting charges for depreciation obsolescence or otherwise of the fixed assets used in the activity, the interest payable on all moneys borrowed for purposes of the activity and all other charges and expenses solely attributable thereto.

Mr. Marsh: Thank you, Mr. Deputy Speaker. This new Clause, like the other new Clauses that we have discussed today, is intended to go as far as we can in fulfilling a commitment given in Stand-

ing Committee D to look at some of the propositions in the Bill in terms of the publication of separate accounts for the diversified activities of the Corporation and of the publicly-owned companies.
My hon. Friend the then Parliamentary Secretary, now Parliamentary Secretary to the Ministry of Technology, made the point that
the Bill as drafted goes a very long way towards enabling the Minister to secure all the objectives that have been described. However, we shall certainly consider introducing an Amendment at a later stage, which would more naturally be in Clause 22, to distinguish, in the accounts, between the principal and diversified activities of the Corporation and the publicly-owned companies."—[OFFICIAL REPORT, Standing Committee D, 17th November, 1966; c. 634.]
The new Clause has been drafted to meet that undertaking.
The point should be made that while there was a long session in Standing Committee D and a great deal of talk, there has been, perhaps, less talk but certainly no less knowledge and expertise, to say the very least, in the discussions that we have had with representatives of the steel industry and of the C.B.I. and others. Therefore, all these new Clauses are not the genuflexion of politicians' fulminations upstairs over a period of three months. They are also a reflection of the views which were put forward by sections of the industry in much less time but certainly no less forcibly.
Even without the Clause, I, as Minister, would have power to require publication of the information required, either under Clause 22—(Accounts)—or under the new Clause, about the publication of information concerning activities of the Corporation and of the publicly-owned companies.
I am requiring the publication of this information on the face of the Bill as evidence of the Government's intention to secure disclosure of the results of and the capital employed in, the Corporation's diversified activities. We accept, and have said, that it is right and proper that Parliament, society and the State should be aware of the activities of diversified companies. I am doing it generally with other nationalised industries and looking at the procedures. In the present instance we are putting this in the Bill really as a declaration of faith. It is still the strong view of all who have looked at


the Bill that the powers already exist within the Bill as drafted.
The new Clause is a long and complicated one to read but its purpose and effect are, I think, perfectly clear and understood by both sides of the House. The purpose is to require the disclosure of information in respect of the Corporation's non-iron and steel activities. It in no way reduces the obligations of the companies for disclosure under the provisions of the Companies Act, and, indeed, goes beyond them as, for example, information will be given for each business (over £¼ million per annum) of each company and not simply of groups of companies. I am not making any point of this other than to say that the Clause requires more from the companies than the Companies Act, because the fear was sometimes expressed that for the nationalised sector we might produce something less in terms of what was required from the companies in the Companies Act.
Estimates of capital employed will be given, enabling the return on capital to be computed, which would certainly not be ascertainable for many private businesses. The basis of the Corporation's estimates by turnover, profit and capital will be described in its reports. The new Clause can, therefore, be legitimately claimed as a demonstration of the Government's intention that the National Steel Corporation should be properly accountable to Parliament and the public, and should compete fairly and openly with the private sector.
I have expressed that view before, but it cannot be expressed too often because there is a lot of folk-fear about nationalisation, particularly among many people engaged in private industry. We on this side do not believe that the dreadful things Which are sometimes believed likely to emerge from nationalisation of industry are likely. Among people with strong views about private enterprise, however, there is a sort of folk-fear which exists when an industry is being nationalised. It is, therefore, worth while to give what reassurance one can, because it is certainly the Government's intention that the private sector shall exist and shall continue as an important part of the economy. We have, therefore, produced the new Clause to enable us to go in that direction.
What about the general policy? We are in favour of sufficient disclosure of information to enable Parliament and the public to arrive at informed views about the activities of the nationalised industries. I therefore move the new Clause, which is designed to make it explicit in the Bill what information about non-iron and steel activities the Corporation should provide.
The effect of the new Clause will be that the Corporation will be required to disclose turnover, profit and loss and capital employed in respect of each business of each publicly-owned company or of the Corporation, and each business of the Corporation, and the publicly-owned companies as a whole. It will also be required to set out in the report the way in which the turnover, profit, and capital employed have been determined. This should help to an understanding of the figures and call attention to any changes which may from time to time be unavoidable or desirable, but would affect their comparability from business to business or from year to year.
We have taken seriously the representations that have been made to us. This is a sizeable new Clause. It has involved a great deal of work. I cannot believe that hon. Members opposite are likely to be opposed to it, although they are quite entitled to be and to have views to express about it. I hope, therefore, that the House will see fit to accept the new Clause, which, after a great deal of thought, is intended to go as far as the Government believe is humanly possible to ensure that diversified activities of public companies are not necessarily circumscribed but, at least, that those activities are known so that Parliament, the public and interested parties can make what representations they may wish to make and to put them to the Government and Ministers to decide how far they are prepared to accept those recommendations.

Mr. Patrick Jenkin: In putting forward the new Clause the Minister made the point, as he is entitled to do, that in accepting representations which have been made to him during the earlier stages of the Bill he must not always be taken to have bowed to political pressure by members of the Opposition. Clearly, in putting it like that, the right hon. Gentleman is


right. At the same time, however, he surely cannot deny that there is all the difference in the world between meeting people in private and giving them all sorts of assurances which he is not prepared to repeat in public and, on the other hand, meeting the Opposition in public, whether on the Floor of the House or in Committee, and answering the arguments and dealing with them.

Mr. Marsh: Before the hon. Member for Wanstead and Woodford (Mr. Patrick Jenkin) shatters the almost totalitarian unanimity of purpose which exists between both sides on the ideas behind the new Clauses, may I point out to him that my only intention was to pay credit to people outside Parliament who have also given up a great deal of time making representations, as well as the politicians who have discussed them?

Mr. Jenkin: I do not want to labour the point, but the right hon. Gentleman must recognise that, in a democracy, those who are making representations to Ministers in private feel very much safer if they see them repeated in public, with the Minister giving in public a pledge which he has been prepared to give in private. In the case of this Bill, there are some pledges which the Minister would have been only too delighted to give in private. There have been hon. Members on his own side who have wanted him to go very much further in the Bill than he has been prepared to go.
Having said that, because neither do I want to shatter the totalitarian unanimity, we give a welcome to the Clause, although I have a number of criticisms of it which I shall make in a moment and there are Amendments being taken with it. I wish to place on record that I believe that the Clause represents a major departure in Government thinking on the publication of facts and figures about the activities of nationalised industries. It represents a considerable extension to anything that we have seen in any of the reports of the existing nationalised industries. On that account, I welcome the new Clause.
The Minister gave the undertaking in Committee that it was intended that the new Amendment would
disclose further information on such items as capital employed, turnover and estimated

profit for the ancillary activities of the Corporation and of the publicly-owned companies."[OFFICIAL REPORT, Standing Committee D, 7th December, 1966; c. 2038.]
I think that it is fair to point out that the Minister's attitude on the whole question of the fears and apprehensions of private industry has undergone a considerable change. By that, I do not mean just the fears and apprehensions of the private sector of the steel industry, because we are talking about activities other than the steel industry in the context of this Clause. On Second Reading, the Minister was inclined to pooh-pooh those altogether. I remember on another Bill the famous phrase adopted by the Parliamentary Secretary when he talked about people seeing lions under the bed. No doubt he will remember the Bill to give the Coal Board power to prospect for gas under the North Sea. I detected an echo of that attitude this evening, when the right hon. Gentleman talked about a "folk fear".

Mr. Marsh: It is the same thing.

Mr. Jenkin: The right hon. Gentleman is still reluctant to admit that these fears are genuine. Perhaps we should not pay too much attention to what he says. Rather, we should pay attention to what he does. What he has done is to table this valuable new Clause. I am sure that I am speaking for many of my right hon. and hon. Friends when I say that it represents an advance and will be taken by industry to represent an earnest of the right hon. Gentleman's good faith in wanting to back up the assurances which he has given. There was the assurance, for instance, which the representatives of the C.B.I. had and which was published in The Times that threats of wild fire diversification had receded. That is an assurance which he has backed up by putting the new Clause into the Bill.
The right hon. Gentleman has taken the point before that he considers that he has adequate powers, not only in relation to this industry in the Bill but in relation to the National Coal Board under the Coal Industry Nationalisation Acts, to oblige the Boards to publish information in this form. I am bound to say that at an earlier stage he took a more unsympathetic attitude towards the pleas which we made. At an early stage in the Committee debates, I asked the right hon. Gentleman for the specific point to


be dealt with. The words which I used were:
It is essential that every nationalised industry that engages in diversification projects should always publish annually separate accounts for every single one of those projects. Those of us who have studied the recent accounts of the National Coal Board have been entirely unable to find out what return is earned by the Board on its diversification projects. Separate accounts seem to be a vital necessity."—[OFFICIAL REPORT, Standing Committee D, 10th November, 1966, c. 460.]
8.15 p.m.
One might have thought at that stage that the right hon. Gentleman would have acceded to the point if he was sympathetic to it. Instead, he moved one of the scores of Closures immediately after I sat down, and we never had the matter dealt with. It was only after we returned to the point on different Clauses over and over again and after the right hon. Gentleman had met representatives of industry that he came to recognise that there was substance in the case. He has now met it, and we are grateful.
The point had been touched on briefly by the C.B.I. in its very small but illuminating pamphlet entitled "The manufacturing powers of the nationalised industries". In Appendix II, it set out what the C.B.I. would like to see as the criteria for competition between nationalised and private enterprise. One of the points made was that, if all diversified activities were not to be carried out by companies subject to the Companies Acts, one of the additional criteria which should go in was:
There should be full disclosure of the separate trading results and capital employed in the manufacturing enterprises competing with private industry.
That has been the policy of the C.B.I. for a long time, and I have no doubt that it will welcome the Clause.
With the Clause, we are taking the Amendment standing in my name which was tabled before the Minister put down his new Clause. Since the Clause goes most of the way to meet the points in the Amendment, it would be more constructive if I devoted my attention to the Clause rather than to the Amendment. It is on the Clause that we on this side of the House have a number of criticisms, some of which we feel bound to press to a Division unless the Minister gives adequate answers.
The first and most important of all is that, under subsection (1), the Minister has retained power to delay the introduction of the Corporation's obligations to publish the figures in this form. I am bound to ask him why he thinks that it is necessary to have the power, as the wording of the Clause says, to decide that it will take effect only after such date as the Minister may determine for the purpose of the subsection. I am sure that the right hon. Gentleman recognises that that would enable him to postpone the disclosure for as long as he wished, and it might be convenient in the early stages that the figures should not be published. Therefore, we have tabled an Amendment to make it quite clear that this obligation will arise in the case of any financial year ending 12 months after vesting date.
There is no reason why such a provision should not be included in the Clause. The diversified activities which would be affected by the Clause from the beginning are activities which are already being carried on by the 14 companies and their subsidiaries. They are not new diversified activities. One does not imagine tint, in the first year of its life, the Corporation suddenly will advance into new activities, set up new companies, take over new companies, and embark on new enterprises. Indeed, it would be very foolish if it did any such thing, but it will be carrying on the businesses which it has taken over with the main steel manufacturing companies. This will mean that all the information required to be set out by this Clause will already exist. Indeed, every one of these companies must already have this information as part of the normal management of the business.
There therefore does not seem to be the slightest reason why the Minister could not require the Corporation to publish this information, at any rate after giving the Corporation 12 months' grace so that it can, as it were, settle down and decide the form of the publication, the method of the calculation of the turnover, capital employed, and so on. I cannot for the life of me see why the Minister has felt it necessary to put in what we regard as an unreasonable protection to take power to delay the introduction of the operation of the Clause for as long as he likes.
I do not want to be diverted into what I think will come up on later Amendments to the Bill, but it will be recognised that the Corporation will have immense powers to buy companies, to embark on new businesses, to form companies, to carry on activities miles outside the main business of manufacturing iron and steel, and so on. It is very important that this Clause should apply forthwith to these activities. Statistics already exist in respect of those which are now being carried out, and there is no reason why they should not be published. This will be the effect of the first Amendment.
It is no use the Minister appearing to be forthcoming. Indeed, he was at great pains when introducing the Clause to show how forthcoming he was. He said that it was not necessary. He said that he had the power, but here, nevertheless, to meet this situation he was going to put this Clause into the Bill, and then with the other hand he took it away and said that he would not make it operative until he felt that it was time to do so.
The next point is the question of the lower level below which the Corporation will not be obliged to publish the figures. As the right hon. Gentleman said, this was for a single business of £250,000, and under subsection (2) where there are two or more businesses, or two or more classes of business, the figure is £1 million. I have formed the impression—and this is inevitably a subjective matter—from my understanding of industry—I do not want to boast about that in any sense, but I have spent 10 years in industry—that these figures are too high.
I tabled the second and third Amendments on Monday, the day on which the Notice Paper containing the Minister's proposed Clause was circulated. At the same time I thought it right to consult representatives of industry about whether they considered these figures were right, and I deliberately made no mention of my views. It was therefore surprising, but in one sense gratifying, when, yesterday, I received the views of the representatives of industry, in fact the C.B.I., and found that they had come to an identical conclusion. They recommended reducing these figures to £100,000 and £250,000 respectively, which happen to coincide with my Amendments.
I believe that that is right. I think that these figures are too high. I reiterate that there is an element of subjectivity in this. It is impossible to fix an objective test as to what should be the minimum level, as to what level should be regarded as too small, which is really what we are talking about, but my justification for putting forward what I have is that the publication of capital employed figures, and the publication of profit and loss figures, depend on the businesses being businesses which come within the Clause, and therefore in respect of which the turnover comes above these figures.
If we are talking in terms of a turnover of £250,000, one has to recognise that the capital employed in the business of producing a turnover of £250,000 may be as much as that. It may be on the basis of one for one, £1 of capital producing £1 of turnover. In some sectors it could be even higher than that.

The Joint Parliamentary Secretary to the Ministry of Technology (Dr. Jeremy Bray): indicated assent.

Mr. Jenkin: I am grateful to the hon. Gentleman for assenting to that. The hon. Gentleman has spent some time in the chemical industry, and particularly in petrol chemicals, and he knows that the one-for-one ratio is not a bad general guide. Therefore, what we are talking about is £250,000 of the capital, not necessarily in the Corporation, but in a publicly-owned company—and a publicly-owned company is any 100 per cent. subsidiary of the Corporation—which may represent a sizeable slice of the capital invested in that company. If this is so, if the figure of £250,000 of capital—and indeed it could be more—is regarded as a significant slice of the capital of the company concerned, it seems right that this figure is too high, and that we ought to reduce it. We have suggested lower levels, and, as I have said, these lower levels happen to coincide with the lower levels which the C.B.I., quite independently, recommended.
Another point is the question of the measurement of the capital employed. One of the differences between the Amendment which we tabled to Clause 22, Amendment No. 89, and the new Clause is that there was some attempt


to spell out the method by which capital employed and profits should be calculated. I recognise that this is only one method, and that accountants—and I am no accountant—can justify a number of different methods for arriving at these figures. It may be that the Minister's suggestion of leaving it so large to make sure that in the report the method is set out so that the figures can be properly appraised is as good, if not better, but we make one point on this, bearing in mind the purpose for which this whole exercise is intended.
The point that we make relates to capital employed. Capital employed can be valued by book value—and this is much the most common way of doing it—a written-down value based on historical costs. One can value capital employed on the market value, or one can, if one thinks fit, and if it is appropriate, put it on replacement value. Normally one uses book value, but this can be very misleading, particularly in cases where the capital has been substantially written down, because there the profitability, the return on capital, can represent an exaggerated figure, an exaggerated return which does not represent the true profitability of the enterprise. Therefore, we have suggested that in this case it would be valuable if there were added as a note what the replacement value of the assets which go to make up that capital employed should be. But we have qualified that by inserting the words "where appropriate". I would have thought that that Amendment would be acceptable to the Government, because it leaves them with a wider measure of discretion, where it is appropriate to do this.
8.30 p.m.
A major purpose of the exercise is to provide for the fact that when we have removed from the influence of the market—and especially the capital market—a sector of industry, which is what we do under nationalisation, we are giving it access to Treasury money and removing all the disciplines of the capital market and in those circumstances we need to substitute something else in order to determine the liability of the enterprise. We need to substitute the full disclosure of figures in order to decide, for instance, whether it is time that a certain business should be closed down because it is no

longer earning an adequate return, or is making a loss.
The publication of replacement values as an aid towards that decision could well be helpful, because it would allow us to say, "It may be all right at the moment because, on the written-down values, the business is just showing a return, but if we are going to carry on, eventually we shall have to replace the assets and at that stage we may find that there is no return at all, and that the profit has become a loss." The question whether to continue to carry on the business may well turn on what it will cost to replace the assets in future. That is the argument for putting in replacement values at this stage.
The two last subsections of the Clause are quite unacceptable. Under subsection (7) the Minister has taken powers to exclude from the operation of the Clause certain classes of business. We must know why he has decided to do that. The purpose of the Clause is to inform Parliament and the public—including industry—about the performance of these diversified activities of a nationalised industry, so that we can be satisfied that those activities are viable and it is right that the taxpayers' capital should be tied up in them.
If the Minister takes power to exclude certain classes of business, to that extent that purpose will be frustrated, and it does not tie up with his assurances and the fears that he has recognised—although he still prefers to describe them in somewhat slighting language—that he should retain the power to water down the operation of the Clause as provided by subsection (7).
Under subsection (8) he takes power to vary the amounts. If power to vary was given to him with the consent of Parliament, by way of Statutory Instrument, it might be justified. With the passage of time, and the inflation which must inevitably follow, especially under the present Government, it may be that the figures written into the Bill become out-of-date so that it would be right to vary them. It may well turn out that the figures are too high, and if the Minister does not accept the Amendment he may by experience realise that the figures are too high, and may want to vary them downwards. This should be done with


the consent of Parliament, but subsection (8) provides that:
The Minister may from time to time vary the amount …
and presumably, he may merely have to write a letter to the Corporation saying, "In future I want the published figures to have a higher minimum", or he may ask it to reduce the minimum.
I have said that we welcome the Clause, and the Amendment would strengthen this useful Clause, which breaks new ground and which, even as it stands, provides considerable comfort to the industry, which has expressed fears in the matter.
I hope that the Minister will be able to accept the Amendments, particularly the first. He should not retain power to delay the introduction of the Clause, and if he cannot see his way to accept it I shall have to advise my hon. and right hon. Friends to express their support for the Amendment in the Division Lobbies.

Mr. W. R. van Straubenzee: My hon. Friend the Member for Wanstead and Woodford (Mr. Patrick Jenkin) is such a kindly and gentle man that he often allows the Minister to get away with far more than he should be allowed to. Those who were privileged to be members of Standing Committee D had better place it firmly on the record that the reason why we are discussing this question at all is that the Minister was beaten in argument in Committee. The matter was raised and debated in public. We had to punch every inch of the way, in a Parliamentary sense. That is why the new Clause is here.
Although the Minister seems constantly to express surprise that an Opposition can produce penetrating argument, it is something that he will have to appreciate and become accustomed to. The fact that exactly the same arguments and the same representations were subsequently made to him very persuasively by representatives of industry in whom he has every confidence merely backs up the wisdom of the arguments that we have put forward in Committee. It must be said that if it had not been for the concerted and sustained argument in Committee, we should not have got even as far as we have.
Very few right hon. Gentlemen can play the role of a kindly Father Christmas better than the Minister. Even so cynical a character as I, listening to him tell us that all our fears were unjustified and that all that we were indulging in was a little "folk fear"—a phrase from the recesses of the Minister's mind—realised that he was a superb actor. One felt persuaded very much, until one remembered that we were placing on the Statute Book something which will not be for ever operated by the right hon. Gentleman.
We have to construct the Bill in such a way that it can be operated by others. Therefore, the Minister stands very clearly upon inquiry and he must make a case beyond a doubt for having given with one hand what he proposes to take away with the other. If the right hon. Gentleman regards the arguments which he has received in Standing Committee and from those private sources in which he places great store as being persuasive, why does he seek to take the power in subsection (1) of the new Clause?
Why is it necessary for him to say that the arrangements set out in the new Clause shall come into force only upon such date as he may determine? What factors has he in mind which will hold up his kindly decision? Why is it not possible for him—perhaps not instantly; the House must be reasonable about dates on which the arrangements come into force—at least to give a date beyond which he will not delay the coming into force of these arrangements? Can he not be brought to see how much it weakens the bonus which he regards himself as giving—which we on this side would regard as common sense—if he strengthens his power over these matters by subsection (1)?
This point does not need to be reiterated at length, as it has already been powerfully argued, but as this is a matter of trust, then the trust sought by the Minister is being severely weakened by the powers which he has taken in subsection (1). I cannot see why he should not be able to complete this element of trust by accepting the first Amendment.
Then there is the question of the figures. The right hon. Gentleman made great play with the way in which he was


impressed by the private evidence which he had received from certain sources about thee wisdom of including a Clause like this in the Bill. He now has direct evidence that exactly the same sources, having considered the evidence quite independently, have come to the view that the figures quoted in the second and third Amendments are the ones which he ought to have in the new Clause. If he is impressed with that evidence in respect of the Cause as a whole, will he not be impressed with the evidence of the figures given in the two Amendments, which, as he now knows, carried very great weight with the sources to which he has referred.
If the right hon. Gentleman says that he must have time—one understands this —to consider this, would he at least not undertake, in respect of the second and third Amendments, that he will give very serious consideration to those figures being inserted in another place? Once again, this is a matter which has been cogently argued already and on which I need not detain the House.
Finally, there are the very extensive powers in subsections (7) and (8) of the new Clause. How very useful it is to be able to exempt a busines of a certain class or description. I know that it has to appear in the report so long as it is so exempted, but this is not really a very formidable matter and it is not very difficult for Governments to give some agreeable reason why it continues to appear year after year in the report as exempted.
Since once again it is half or three-quarters of the wish of the Minister to show his good faith, why does he require so very major a power as that? Why is it necessary to create doubt and anxiety in the minds of people who are very seriously concerned about the general effect of the Bill upon certain major private sectors of industry? Let there be no misunderstanding about this. I believe that this argument has got across well and truly to the House. We must not go into this in any depth on this occasion; there will be other opportunities. However, by common consent on both sides of the House the powers contained in the Bill as ht now comes before us in regard to diversification are very extensive indeed. As one who is always watchful about Government in the abstract and who never believes that Governments

withdraw from powers that they take upon themselves, I feel deeply—I hope that hon. Members on both sides of the House do—that it is one of the duties of hon. Members to hedge about with proper restriction and supervision the very extensive new powers that we give from time to time to Government in the abstract and that we shall certainly give in the Bill.
I trust that the House will feel that these are very cogent reasons for looking closely at the Amendment. However, I do not want the right hon. Gentleman to feel that I have been mealy-mouthed in my welcome for the new Clause. I welcome the penitent way in which he has come to the House and brought the new Clause with him. It is a good augury. I do not want any words of mine to cause the right hon. Gentleman not to do this on other occasions. However, the reasons for this are Parliamentary ones overwhelmingly. [Interruption.] Does the hon. Member for Sheffield, Brightside (Mr. Winterbottom) want to say something standing up, or does he prefer to sit down? Apparently he does not wish to rise. All right. We always like to hear from him. From the short time that he was a member of the Standing Committee, he will remember that the arguments on these matters were very persuasive and penetrating, and when he comes to address the House, he, as a fair-minded man, will, I feel certain, admit that the Minister has responded to these arguments. I hope that the Minister will complete the job by removing the lurking sense of anxiety which, rightly, is underlined by the Amendments.

Sir D. Glover: I hope at another stage in our debates on the Bill to have the opportunity of speaking about my objections to diversification of nationalised industry, but I do not think that this is the right moment to go into it in any great detail.
I think that the very cogent point just made by my hon. Friend the Member for Wokingham (Mr. van Straubenzee) is one of which the Minister ought to take very much more account than he is doing at the moment. I was not a member of that exclusive club which debated the Bill in Standing Committee, but there is no doubt that the Opposition seem to have done a very good job. Even if we have only


persuaded the Minister to go as far as bringing forward the new Clause, it certainly is an advance on the Bill as it appeared before us on Second Reading, and to that extent we derive some satisfaction from the work done during the Committee stage.
8.45 p.m.
Without wishing to be ideological, I am always suspicious of a Minister, Conservative or Labour, who takes powers which are greater than he really needs. I am not encouraged by assurances given by Ministers. As has been said, Ministers come and go, political climates change and difficulties arise. The assurances given in debates have no binding force in law and, therefore, if a Minister takes through Parliament a Measure containing more powers than he really needs, he is not assisting the democratic process. That being so, I do not see why the right hon. Gentleman will not at least accept the Amendment which would insert the words "more than twelve months after vesting day". He might wish to slightly alter the period, but it is commonsense that there should be a time beyond which the Minister would be bound by this House. The right hon. Gentleman can be a reasonable man and I hope, therefore, that he will bind himself or his predecessor to a certain date—be it 1968 or 1970—by which time the Clause would have to be implemented. I do not see why the right hon. Gentleman needs the present open-ended escape hatch for non-implementation.
When considering the Amendments designed to leave out £250,000 and to insert £100,000 and to leave out £1 million and insert £250,000, as my hon. Friend the Member for Wanstead and Woodford (Mr. Patrick Jenkin) pointed out, a company doing a turnover of £1 million a year could easily have a capital of about that amount, depending on its mode of operation. Such a firm might be a trustee company, meaning that it is looked upon by the State as an organisation of such sound financial construction, such weight in our affairs, that it is suitable as a trustee stock. Surely such a company, doing a turnover of £1 million, should have its affairs disclosed in detail so that Parliament can assess what is going on in the Corporation.
The same applies to a company with a turnover of £250,000. The Amendment seeks to reduce the figure to £100,000. I am doubtful about the wisdom of nationalised industries having the proposed wide powers of diversification. Suppose that a company was doing a turnover of £200,000 a year making tin-tacks. That would represent a substantial part of the whole tin-tack industry of this country. That company might be losing £50,000 a year in its activities. It might, therefore, be putting out of operation its competitors in the free enterprise side of the economy, firms which are also making this useful item.
The affairs of such a company should be detailed in the report so that the free enterprise sector of the economy is able to see if it is facing fair competition from the diversified Corporation. No fair-minded person could take objection to such a company's affairs being disclosed. That being so, how much more does this argument apply to a company with a turnover of £1 million? A company with such a substantial turnover which is not disclosing its affairs could be making heavy losses and they could be covered up in the whole activities of the Corporation. Since the right hon. Gentleman wants to run an efficient show, I trust that he will accept the Amendment. I am sure that if the right hon. Gentleman again considers the figures he has inserted he will be forced to the conclusion that they are too high. It may be that he would settle for half way. Perhaps he would not settle for £100,000 and £250,000, but all the arguments so far advanced show—and they are supported by the authoritative opinion of those in the steel industry—that the figures in the Clause are far too high and should be reduced.
I am very suspicious about subsection (7). I know that it says that some reason why this direction is in force shall be stated in each report, but what considerations will apply for a particular activity not to be included? To my suspicious and rather cynical mind that will not be the case if the concern happens to be making rather a large profit, or if it has doubled its turnover in the previous 12 months, or is the most cost-effective unit in that particular sphere in Europe. If I know anything about Governments or even about commercial undertakings, the


temptation to human beings not to publish their bad shows if there is an escape hatch is too great.
I am convinced that this subsection is included to provide the Minister and the Corporation with a perfectly good escape hatch for hiding those unsuccessful activities—

Mr. R. E. Winterbottom: A nasty mind!

Sir D. Glover: I do not have a nasty mind at all. I am very sorry to say that my mind will be proved in history as being only too accurate. I have never found people hiding their successes under a bushel. It is usually something not very successful that they want to hide—

Mr. van Straubenzee: Will my hon. Friend remember what a nasty mind he had last summer, when he was doubtful whether it would be possible to have an incomes policy without invoking the compulsory powers of the Prices and Incomes Act?

Mr. Deputy Speaker (Mr. Sydney Irving): Order. The hon. Member for Ormskirk (Sir D. Glover) would not be in order in replying to that intervention, which was out of order.

Sir D. Glover: My hon. Friend's intervention is very valid, because I have since been proved to have been absolutely right in my suspicions of what would happen. During our debates on the Finance Bill I got an assurance that the S.E.T. would be repaid in six weeks. It is now official policy, as I said at the time it would be, to repay in three months. I have been proved accurate there, and I think that I shall be proved accurate over this subsection.
Perhaps the Minister will tell the House under what conditions he thinks he would use the subsection when it was to the advantage of his Government or of the Corporation to disclose the success. I think that the facts will be kept hidden because the Government and the Corporation will not want anyone to know. Human nature will see to it that the sort of things that will not be disclosed will be those that the Government and the Corporation think would turn out to their disadvantage.
On these grounds, this group of Amendments have overwhelming weight of argument behind them. I hope that my hon. Friends will divide the House, because matters of great principle are involved.

Mr. Richard Wainwright: The hon. Member for Ormskirk (Sir D. Glover) clearly wants it both ways. I suspect from the course of most of this evening's debate that so do most of his Conservative colleagues. They want the Minister to "run an efficient show", by which presumably hon. Members mean commercial success for a nationalised industry. But they want it in every respect to be under the public spotlight so that every twitch of its muscles can be registered on computers and everyone can ask, "What on earth is it up to now?"
If possible, we Liberals want to get from our nationalised industries and those about to be nationalised, commercial success, but to allow this industry to have that, we must allow it that measure of secrecy which every commercial undertaking requires for some stage of its operations. It is true that in some circumstances confidentiality can be abused. I have sufficient confidence in this place, although I am sorry that it is not shared on the Conservative benches, to believe that Parliament can prevent necessary confidentiality being abused and prevent the Government getting away with it.

Sir G. Nabarro: Not on your life.

Mr. Wainwright: If not, we must have a Parliament which will see that we can prevent that.

Sir G. Nabarro: This comes back to the same point if we are prevented by the rules of order of the House of Commons from probing the day-to-day commercial activities of nationalised industries. We have one nationalisation day a year, which is wholly inadequate to scrutinise those commercial activities.

Mr. Wainwright: The hon. Member for Worcestershire, South (Sir G. Nabarro) falls below his usual standard, which I admired so much in the autumn days. This subsection clearly makes any confidentiality in regard to the provisions of the new Clause specifically a responsibility


of the Minister. It means that if the Minister makes use of the subsection he will be accountable for its use in this respect. I do not think that can be controverted. I have no objection to this confidentiality provision.
Subject to one or two improvements which I hope to outline, we welcome this new Clause and as Liberals we are not in the least affronted that it has been born out of a relationship, apparently, between the Minister and representatives of the industry rather than wholly from the Parliamentary processes of this House. Politically it is interesting that at the moment the Conservative Opposition has lost any constructive creative relationship with industry whereas apparently at present the Government enjoy some small measure of success in that respect. This is clearly demonstrated by the extraordinary Amendment No. 89 which is part of our discussion at the moment.
I hope that the proposed definition of capital employed in Amendment No. 89 will be taken by Jonathan Miller into his next version of Alice in Wonderland for television:
'When I say working capital', said the Duchess I never mean stocks, stores, work-in-progress or even a bank account and in my country those things are not working capital. Indeed I doubt whether they exist'.
There is no reference in the formula proposed in Amendment No. 89 to any element of stocks, stores or work-in-progress or even a bank account. This is one reason why I much prefer the Government's new Clause. Nevertheless, there are some amendments I should like to suggest for its operation if not in its enactment.
9.0 p.m.
First, I suggest that, as soon as any of these diversified activities reaches a stage which a reasonable man would regard as significant in scale, the taxpayer and Parliament are entitled to its full statistical life story from the beginning. The moment a child becomes interesting, people are interested in the total cost of rearing and educating it. Therefore, there should be some understanding that the Minister will require the Corporation and its constituent bodies to keep the statistical history of each diversified activity from the very

beginning, even though publication is not enjoined until the scale of operations becomes large enough for it to justify publication. The full story will undoubtedly be of value to the taxpayer and to Parliament.
As to the criteria for when a diversified activity becomes significant, it is a pity that we may be forced to accept the concept of turnover, because this is not the ideal test. It is not the amount one is able to sell of a project which is the basic test of its scale of interest. It is how much capital has been invested in the project. It is possible to imagine very large sums of capital being expended in a project which produces very little saleable value. Under the present turnover test, that would escape public examination under this provision.

Mr. Patrick Jenkin: The hon. Gentleman will no doubt bear in mind, in the context he has just mentioned, that the Coventry project—

Hon. Members: Speak up.

Mr. Deputy Speaker: Order. The hon. Gentleman must address the Chair.

Mr. Jenkin: I apologise, Mr. Deputy Speaker. No doubt the hon. Gentleman will bear in mind the Coventry project which the National Coal Board has in hand at the moment and in which I believe that there is between £11 million and £12 million of capital producing virtually no turnover.

Mr. Wainwright: I am grateful for the example, but it is not the only one. Until the operation of the Clause or something like it has been tested, I find it difficult to suggest a test of capital employed in which I could have total confidence. This is still a difficult concept to apply, particularly in a process industry. I reiterate that when a significant scale of operations is reached we require the full story.
The other suggestion I make about the operation of the Clause is that all the statistics published under its provisions should have been subject to audit and to report by the Corporation's auditors. Some very valuable but at the same time very tricky accounting concepts are involved in the Clause, particularly in the computation of turnover which, in a large group, can often be monkeyed about


with, consciously or unconsciously, by inter-company sales, by the price at which inter-company sales are transacted, and also by the basis of measurement of capital employed.
Here we come up against the question of the value set upon fixed assets. I cannot for a moment accept the Conservative Amendment enjoining the compulsory use of replacement value, because often in business it is very good management to use until they are practically run-down fixed assets which the business has not the slightest intention of ever replacing. To use a local example, I imagine that the existing annunciators in this building have a fantastic replacement value, because I gather that there is no other building in the country which uses them and presumably they are now hand-made. Nobody will deny that as long as they clack away it is good business to use them until they are run down, but for Members to have to face the taxpayers with the allegation that we are using up capital employed to the extent of the vast replacement costs of our annunciators would expose us to quite unnecessary and unjustified shame.
What is much more important is that, whatever basis of capital employed is adopted for the implementation of the Clause, Parliament and the taxpayer should have a full report by the Corporation's auditors on the statistics and the basis for them. The Minister spoke understandingly about a "folk fear" of nationalisation. He did not deny that folk fear can often be a very healthy reaction, as pain can be, and sometimes very justified. I hope he will also agree that there is equally a folk fear of statistics, especially of official statistics. When they go out of office, and think that they are going to be out of office for some time, Ministers are prominent among those who show a deep folk fear, even a folk scorn, of official statistics.
I hope that in the operation of this new Clause measures will be taken to see that the statistics do not excite quite the same degree of folk fear as some which we had in the past.

Mr. A. G. F. Hall-Davis: The hon. Member for Colne Valley (Mr. Richard Wainwright) and myself have taken part in debates

together outside this House many years ago, and I hope that he will accept my comment as being in no way personal but entirely objective when I say that I listened to his remarks over the past few minutes and regarded them as reactionary, ingenuous and unfair.
For anyone at the present time to suggest that one should have any reservations about disclosures of activities and finances of nationalised industries, when the whole trend in the control of the private sector of industry is towards fuller disclosure of activities and information, is reactionary. It was quite ingenuous to suggest that we should not concern ourselves with improving methods of Parliamentary control over the nationalised industries.
I never like speaking for my colleagues, who almost invariably disagree with most of what I say, but I believe that the hon. Member for Colne Valley must be almost the only Member in this House, at any rate outside the ranks of his own party, who does not believe that our procedure for keeping closer control over the policies of the nationalised industries and their activities needs improving.
He was certainly unfair, I thought unworthily unfair, when he suggested that this Amendment originated largely from outside the House and our Parliamentary procedures and the Committee. I have heard my hon. Friend the Member for Wanstead and Woodford (Mr. Patrick Jenkin) over and over again in recent months draw attention to the need for just this kind of disclosure about the nationalised industries. I intended originally, without striking any contentious note, to congratulate first the Committee and then the Minister on the production of this new Clause. If the Minister appears to have hedged his Clause with certain reservations, I believe it may well be because the right hon. Gentleman at least appreciates its significance.
I listened with particular interest to the speech with which he commended it to the House. I shall read it in HANSARD tomorrow with great interest. I hope that it marks a change of policy by the Government. I hope that he will be able to spread his views more widely and have them implemented in other Government measures and other nationalised industries, because while we have a mixed economy—and very few people expect


us to eliminate such a state of affairs in the foreseeable future—it is important to pay attention as much to laying down proper guide lines for the peaceful coexistence of the private and public esctors as to debating where the division should lie.
This Clause is a helpful move in that direction. I believe that when looking at it the Minister was overcome by a certain degree of timidity about the enormity of the step forward which he had taken, and that is why he proceeded to write in certain restrictive provisions. The power to delay, which appears at the very beginning of the Clause, is unnecessary. Surely we can have a specific date written into the Clause. It is not much consolation to read at the beginning of the Clause that, however many good things it contains, it may be postponed indefinitely at the Minister's discretion.
There is, secondly, the subject of turnover. I do not wish to be dogmatic about the first figure of £250,000, but I find the arithmetic a little puzzling. Perhaps I am being a little obtuse, but I do not see why when there is grouping the figure is multiplied by four instead of by two, which is the combination which I would have expected. Perhaps the Minister can explain that.
There are, lastly, the two subsections at the end of the Clause. That which enables the Minister to exempt certain activities is entirely contrary to the correct spirit of the Clause as a whole. One can appreciate that there may be certain exemptions which the Minister could feel it necessary to make. It occurred to me that in an industry of this size even canteen sales might go above the figure which is being recommended, and surely that type of activity could be dealt with specifically without the Minister needing to take such general powers of exemption to himself.
The most alarming part of the Clause is the power to vary the limits which are set out in it. I share the doubts of some of my colleagues that the Minister may not represent the permanent attitude of the Government or of the party of which he is a member and he may find himself subject to considerable pressures if he continues on the enlightened road which

the new Clause at any rate indicates. I therefore hope that he will safeguard himself against these pressures by allowing to be taken out of the Clause the power to vary the limits. This is perhaps its most objectionable feature and it opens the door to considerable and regressive second thoughts.
I hope that when we come to some other significant Clauses which lie ahead of us, before replying to the points put to him, the Minister will quickly read through what he said about this Clause, because he showed a certain welcome openness of mind. When he referred to the "folk fear" of the private sector he was recognising something which does exist. He said that we wanted to see the public sector competing fairly and openly with the private sector, that not only must it do that, but must be seen to do that. That is the significant feature and that is the point of the new Clause and certain others. The reason for this folk fear is the sheer scale of the organisations in the public sector and the fact that it is difficult to disentangle the truth about activities of bodies of this size. I hope that the Minister will be able to meet the views which have been expressed about the qualifying subsections which he has included in the new Clause.

Sir G. Nabarro: The new Clause represents a substantial concession to the Opposition view expressed in Standing Committee and for that modicum of comfort I shall, of course, eternally be grateful. It is also a piece of original thinking on the part of the right hon. Gentleman's Ministry in the context of furnishing information about nationalised industries. There has been nothing like it before in nationalisation Statutes, and I wish to be generous enough in what I say to attribute to the Minister that he has learned a good deal in the 20 years since the first nationalisation Statute appeared in 1946, whose author, the right hon. Member for Easington (Mr. Shin-well), is now seated below the Gangway opposite. It was a very imperfect Statute, as we would expect from an imperfect Privy Councillor. [Interruption.] The right hon. Gentleman is a good friend of mine.
9.15 p.m.
We have had two decades of nationalisation and, while I am grateful to the


right hon. Gentleman for furnishing us with some concession in this matter, the Clause has three shortcomings. First there is the delay in the operative measure of furnishing the desired information; second, the exclusion of certain information, which I call the subterfuge provision; and, thirdly, the power of the Minister to vary the limits, which I regard as wholly obnoxious. I do not take the view of the hon. Gentleman the Member for Colne Valley (Mr. Richard Wainwright) or accept the rebuke given to my party by him when he said that the purpose of our Amendments was to secure continuous interference in the affairs of a nationalised industry.
If my right hon. Friends and myself accept the concept that once an industry is nationalised we should all endeavour to have it operated on the best possible commercial lines and operated at a profit, if we accept those terms, we ought also to accept that political interference with the commercial concern should be reduced to a minimum. But political interference is not synonymous with the furnishing of comprehensive and accurate information concerning the activities of a commercial concern on the basis of an annual report and accounts.
That is all that I am asking for. The right hon. Gentleman the Minister knows full well that my hon. Friends and myself have spent years trying to extract reliable information about the subsidiary activities of the National Coal Board. Little by little we have succeeded, but we still have not got comprehensive information. In the context of this Bill it is infinitely more important that we have accurate and reliable information over an auditor's certificate once a year.
Why is it more important? This is not the Iron and Steel Bill. That is only the fancy nomenclature attached to it by the Ministry. The proper name for it is, of course, a nationalisation enabling Bill. Under the powers of this Bill the Ministry may nationalise at its will anything from pins and needles to jumbo jets, so wide are its powers. That is why I want better information. I am not alone in this thought, or in this allegation. I cannot do better than to quote the most respectable of our daily national newspapers—the Daily Telegraph—[Interruption.] Did the hon. Gentleman the Member for Sheffield,

Brightside (Mr. Winterbottom) say that I was asleep?

Mr. Winterbottom: No. I said that the hon. Gentleman had slept.

Sir G. Nabarro: No. I attribute to the Daily Telegraph utter respectability, and a great majority of us heed what its leaders say about important national issues, though it may be somewhat Right wing in its outlook.
Once there is a Labour Government in office with a huge majority and in its election prospectus promising nationalisation of steel, and once that Measure is through the House on Second Reading, my hon. Friends and myself have to accept that and we are trying to improve the Bill. This is what the Daily Telegraph said on 18th November on my point about the breadth of powers in the Bill:
Angry scenes in Commons standing committees tend to be dismissed as the ordinary incidents of Parliamentary life—products of frayed nerves and overwork. Yesterday's heated discussion in the standing committee on the steel nationalisation Bill, however, deserves more serious attention, since it concerns the most indefensible provision of that thoroughly indefensible Measure.
It went on to say about the point of the breadth of the Bill:
An arrangement which would allow a constitutionally irresponsible body appointed to manufacture steel to start building motorcars or aeroplanes or, with a nod of approval from the Minister, buy a newspaper, is intolerable.
But that is what the Bill allows the Minister to do. Nobody can deny that. That is why I call this a nationalisation enabling Bill, and that is why I want the information. We have never had the information about the commercial activities of nationalised industries on the scale which we are now demanding, and there has never been as great a need for it as there will be when the Bill reaches the Statute Book.

Mr. Peyton: My hon. Friend refers to this as an enabling Bill. Doubtless he will recall that the Minister described the Bill as a kind of umbrella under cover of which the industry would be taken over.

Sir G. Nabarro: I am grateful to my hon. Friend. What he says is true.
I wish to underline this point by saying that the powers in the Bill enable the Corporation to engage in the manufacture of any of those articles or goods which are in any of the articles of association of any or all of the 14 companies specified in the First Schedule. When one sets up a company to manufacture, one instructs the solicitors to draw the articles of association very wide to cover every contingency. The articles of association of these 14 companies have been in existence for many years. Most of the manufacturing provisions have never been employed, but now that we are vesting them all in the State they may be employed by take-over or by expansion or any one of a dozen other methods.
As this proliferation of manufacturing processes will be engaged in direct competition with private enterprise industry, and because the whole nationalised sector of manufacture and distribution, not only of iron and steel, but of all these manufactured articles, will be financed by Treasury money raised on preferential terms, furnished to these firms at lower rates of interest than those at which their industrial competitors in the private enterprise sector can secure their capital monies, thereby giving to the State enterprise a huge advantage, I want the power to scrutinise annually what each of these companies is doing.
It is wholly insufficient for the hon. Member for Colne Valley to impugn my right hon. and hon. Friends and myself with dishonourable motives of a busybody character, of a meddlesome Matty character. He used the term "continuous interference" in the affairs of these firms. I do not wish continuously to interfere in them. But I am sure that unless we win our point about the furnishing of information, and unless we pin ministerial responsibility firmly on the Minister's shoulders, we shall be blocked by the Table when inquiring into the affairs of these firms.

Mr. Winterbottom: The hon. Gentleman makes the point that he wants the statistics and information because of the diversity of the industry through nationalisation. He is not objecting to the diversification of the industry being less than the diversification provided to the private companies under their articles of association but only in order

to provide the statistics and information relative thereto.

Sir G. Nabarro: The hon. Gentleman's intervention is incomprehensible.

Mr. Winterbottom: Do you object to the nationalised industries—

Mr. Speaker: Order. I do not object to anything.

Mr. Winterbottom: May I ask through you, Sir, whether the hon. Gentleman objects to the nationalised industries having the same power which the private steel industries already have in terms of diversification?

Mr. Speaker: Order. Before the hon. Member for Worcestershire, South (Sir G. Nabarro) is tempted to get out of order, may I point out that we are considering the need for information, statistics, and their adequacy.

Sir G. Nabarro: I am grateful, Mr. Speaker. I do not wish to dodge what the hon. Member for Sheffield, Bright-side has said. I hope to catch your eye, Mr. Speaker, on later Amendments. The hon. Gentleman's point will arise more appropriately then, and I hope that I shall be able to deal with it.
On the question of information, there are two instruments. There is the Parliamentary report on the nationalised industries. But there is in another place the Companies Bill. If and when that reaches the Statute Book, it will require private companies to divulge information concerning their affairs on a much more comprehensive scale; and those provisions must be applied to every company in which the National Steel Corporation holds 51 per cent. or more of shares.
I conclude by saying that in my view there is no reason for the delay in the operation of the new Clause. In my judgment—I am quite specific about this —it should operate from the end of the chargeable accounting period of any company to which it applies immediately following vesting day. That could only be a delay of a few months.
Second, there should be no exclusion whatever from the reports of the nationalised industry where it is holding either a majority or a minority interest in a company associated with it. There is no


reason for such exclusion. I call the subsection which gives the Minister powers of exclusion, as it is at present drafted, a subterfuge subsection. In another place he should take it out and display the characteristics of honesty and complete candour that have on earlier occasions been associated with his name.

Sir D. Glover: When?

Sir G. Nabarro: Before he became Minister. That was why I said "earlier".
Finally, there is no justification whatever for varying the limits. If we stipulate the limits now, we shall have continuous inflation as long as there is a Labour Government. Therefore, the limits will steadily be diminished in any event. That is what I want to see happen. I see no reason, therefore, why the Minister should continue to plod it out that he wants these limits insisted upon.
I hope, therefore, that my right hon. and hon. Friends will vote on several of these Amendments although I should not myself care to vote against the Clause itself because, as I said at the outset, it represents a substantial concession to the Opposition view expressed in Standing Committee.

Mr. Marsh: We have had a series of interesting contributions on this issue. Again, right hon. and hon. Members opposite have paid tribute to the Government's generosity, willingness to be helpful and general efficiency in dealing with these things, and for this we are grateful. We have had a contribution from the Liberal Party, although the hon. Member who made it appears once more to have vanished from the scene. That is a pity because I assumed that his presence meant that he had just been elected leader of the Liberal Party or something.
The hon. Member for Morecambe and Lansdale (Mr. Hall-Davis) put his finger on a lot of our problems in this matter. This is a very large new Clause. It is a very important one and it is moving in fields Where none of us knows the answers to some of these things. This has gone on throughout our debate. No hon. Member has suggested that he knew what the limit was. Hon. Members opposite have merely said that in their view the limits in the new Clause were too high. Nobody on

the benches opposite has argued that he knows the date of operation. Some suggestions have been made. The argument has been used that a date should be fixed. These are some of the problems with which we are faced.
9.30 p.m.
The Government have drafted the new Clause with the intention of meeting many of the points which have been made this afternoon and previously, but it tends to move into a rather new field and has some important implications. The issues which have emerged in the course of the debate have been fairly narrow and few. The hon. Member for Colne Valley (Mr. Richard Wainwright) made the point, with which naturally, I agree, that by and large there was nothing wrong with the new Clause, and I was almost going to say that one should be grateful for small mercies. He had some interesting points on the administration of the Clause which will be looked at, since they do not involve changes in the Statute.
What have been the specific arguments facing the House? First of all, there is some worry about the power to delay which exists in the Clause. I accused the hon. Member for Ormskirk (Sir D. Glover) of having a nasty mind, but I suppose that it is possible, theoretically, for a Minister to use this power and, in so far as he has to determine the date upon which the Clause takes effect, it is theoretically possible for it never to take effect. The reason for this particular revision is that it will be very difficult, certainly in the first year—

Sir D. Glover: I am sure that the right hon. Gentleman does not want to misquote me. I was not being really hostile. All I said about the date was to express concern about whether it was to be 1968, 1969 or 1970. It was subsection (7) which aroused my suspicion.

Mr. Marsh: I realised that the hon. Gentleman had suspicions, and I assumed that he was suspicious about this point as well.
First of all, we do not know the date when vesting will take place. Many of the companies have different systems and different accounting periods. The sole purpose is to enable us to fix the earliest date that we can, and it is certainly the


intention to publish at the earliest possible date. It is the intention to fix a date under subsections (1) and (2), and therefore it will be done once we are able to see how long it is likely to take in terms of bringing the various groups together.
In the end, hon. Gentlemen opposite moved away from the Amendment, which produces very real difficulties, and got down to saying that what has to be done is to put a limit on the Government's power to delay. That is a point of view which could be put. However, I suggest that there is no intention and that, in practical terms, it is not possible for the Government to avoid implementing the Clause. It is the Government's intention to fix a date under subsections (1) and (2) and to publish the information at the earliest possible date.
The other point which was made is that the limits are too high. That again is something which none of us can argue in terms of absolutes. We do not know; it is a matter of opinion. A plant costing £250,000 is a very small one. If I might give an indication, I do so as a serious example of how expensive things are as a result of the inheritance of 13 years, etc. An example of how rapidly one arrives at the sort of level of £100,000 is the case of the Ministry of Power's own staff canteen, which last year had a turnover approaching £90,000. It would be pretty pointless to have figures that were too low—

Sir D. Glover: It is obviously too big a Department.

Mr. Marsh: I would only say that the Ministry of Power is a very small Department. All I am arguing is that it is not true that £250,000 represents a large plant. It does not. Figures of £100,000 bring one down to very small plants.
The intention here is to try to find the right figure. I am not saying that the Government know the right figure. I am saying that we have chosen a figure which is necessarily an arbitrary one, and it is attacked, quite legitimately, by hon. Gentlemen opposite who say that they do not know the right figure either, but they think that probably the Government's figures are wrong, in much the same way as we think that their figures are wrong.
That is precisely why the Government have adopted this non-doctrinaire approach. They have adopted it because they are open minded on these things, and are willing to listen to the representations made by hon. Gentlemen opposite. They have done so for this reason, and for no other. We had to include in the Bill the very provisions which enable the Government to vary the limits. Hon. Gentlemen opposite, far from being worried about the Minister having power to vary the limit, should be grateful, because the purpose of having the power is wholly and solely so that, in the light of experience, he can ensure that the limits are not too low, or too high.
I think that an argument can be made on either side. Even the figures in the Bill are low in terms of industry. If they turn out to be too low, the Minister will have power to vary them. If they turn out to be too high, again this power of variation will be needed. The power to vary is there solely so that when we move into this new field—"romp" is perhaps a better word—we will be able to look at this in the light of experience to see whether the figures which have been quoted by hon. Gentlemen opposite are right, or whether ours are right, or whether both are wrong and there is some other figure which should be used. No one knows the figure. We have put in a figure which we believe to be right, and, therefore, precisely because nobody knows the figure, we have the power to vary to go with it.
I come now to the point raised by a number of hon. Gentlemen opposite, namely, provision for the omission of certain business or classes of business. This is a purely practical power. As I think the hon. Gentleman said, some of these organisations have large welfare activities, which again will come within the limits. We are dealing with very big organisations. The hon. Member for Worcestershire, South (Sir G. Nabarro) asked for specific examples. One example is that of welfare activities which are not of a competitive commercial character and which could well come within the figures which have been mentioned.
Another example, which is a real and serious one, is the effect on overseas activities, where publication might be


prejudicial to the Corporation's business, particularly in exports. The purpose of the omission is not to enable Ministers to get away with something. I recognise many of the difficulties which have been raised about Parliamentary opportunities for raising these matters. No Minister in this Parliament could get away with omitting great chunks of industry from a Bill merely because it was convenient for him to do so. People will know where the omissions are being made, and reasons will have to be given.
I gave two real and accurate examples, the first the pure convenience of the Corporal ion, namely, welfare activities, and the second the effect which publication could, in some circumstances, have on overseas interests. I think that hon. Gentlemen will recognise that this could be prejudicial, particularly with regard to exports.
During the debate no one has suggested that the Opposition would vote against the Clause, because the intention behind it is shared by both sides. Doubts have, quite understandably, been expressed by those Who were reading the Bill as distinct from arguing the reasons for putting in various parts of it.
I agree that there are some things which, in this imperfect world, have to be taken on trust—not on the basis of individual Ministers but on the basis of the Government. Whichever Minister holds this office he is committed by this party to this policy. It is not the policy of an individual Minister; it is the policy of Her Majesty's Government. In the light of that fact, and with the explanations which I have given on some points which have worried hon. Members opposite, I hope that the House will see fit to accept the new Clause.

Mr. Patrick Jenkin: With the leave of the House, I want to reply extremely briefly to one or two points made by the Minister. We agree that the Government are breaking new ground and that this creates its own difficulties. We recognise that the Minister must retain some measure of flexibility. We hope that if the Clause proves to be workable it will not be long before this procedure is extended to other nationalised industries, or that if, as the right hon. Gentleman has consistently maintained, he already has power under the respective Acts to oblige the production of these figures, he will

exercise that power. His point about welfare is a bad one. The Clause refers specifically to businesses, and it is doubtful whether the sort of welfare organisation to which he was referring could properly be described as a business.
It may be that he has a good point on overseas activities, but despite what he says we maintain that it would not be right for him to be able to exclude these simply by Ministerial fiat. I hope that my noble Friends in another place will think it right to return to the Clause and to suggest that the power to exclude should be operated by Order. Similarly, the power to vary the amounts should be exercised by Order—if necessary by way of the negative procedure, if it is thought that the affirmative procedure is too cumbersome. It should be subject to some form of Parliamentary scrutiny.
These figures are to be provided for the information of Parliament and the public, and the Minister should not retain power off his own bat substantially to water down these provisions. Indeed, the Minister may well consider introducing such Amendments himself when the Bill reaches another place.
I retain my view that limits are justified. I am not persuaded by the argument about the Ministry of Power canteen. I would not have thought that this could possibly be described as a capital-intensive activity. I suggest that it is a labour-intensive activity. I should have thought that £100,000 was an appropriate limit. I have some sympathy with the point made by my hon. Friend the Member for Morecambe and Lonsdale (Mr. Hall-Davis), who suggested that the relationship of the two figures in subsections (1) and (2) seemed rather strange, and that we should quadruple the figure from £250,000 to £1 million when we are talking about two or more classes of business. This point, too, would have been dealt with by the Amendments.
However, it is only on the first point made by the right hon. Gentleman that I feel that we cannot accept the case which he has put this evening. He has said that once we are able to see how the Clause can be implemented it is his intention to make it operative. He said that in political terms it would not be possible to delay its operation. The House cannot be satisfied with that. We


see absolutely no reason why businesses that the Corporation is taking over should not publish figures from the beginning. We have allowed a 12 months' delay in our Amendment.
We have imposed this provision only in relation to subsection (1), concerning individual businesses and individual companies in the Corporation. Subsection (2) will obviously take longer, because in that case we are going to aggregate accounts which may have been prepared in quite different ways by different companies. Time is necessary to enable that to be done. That is why there is no comparable Amendment to subsection (2). But on subsection (1) I am totally unpersuaded by anything said by

the Minister, and when the time comes it will be my intention to move the relevant Amendment formally, and I hope that my hon. and right hon. Friends will see fit to support it in the Lobbies.

Question put and agreed to.

Clause read a Second time.

Amendment proposed to the proposed Clause, in line 2, leave out from 'ending' to 'carried' in line 3 and insert 'more than twelve months after vesting day'.—[Mr. Patrick Jenkin.]

Question put, That the words proposed to be left out stand part of the proposed Clause:—

The House divided: Ayes 303, Noes 229.

Division No. 234.]
AYES
[9.45 p.m.


Abse, Leo
Crosland, Rt. Hn. Anthony
Griffiths, Rt. Hn. James (Llanelly)


Albu, Austen
Cullen, Mrs. Alice
Griffiths, Will (Exchange)


Allaun, Frank (Salford, E.)
Dalyell, Tam
Gunter, Rt. Hn. R. J.


Alldritt, Walter
Davidson, Arthur (Accrington)
Hale, Leslie (Oldham, W.)


Allen, Scholefield
Davies, Dr. Ernest (Stretford)
Hamilton, James (Bothwell)


Anderson, Donald
Davies, G. Elfed (Rhondda, E.)
Hamling, William


Archer, Peter
Davies, Harold (Leek)
Hannan, William


Armstrong, Ernest
Davies, Robert (Cambridge)
Harper, Joseph


Atkins, Ronald (Preston, N.)
Davies, S. O. (Merthyr)
Harrison, Walter (Wakefield)


Atkinson, Norman (Tottenham)
Delargy, Hugh
Hart, Mrs. Judith


Bacon, Rt. Hn. Alice
Dell, Edmund
Haseldine, Norman


Bagier, Gordon A. T.
Dempsey, James
Hattersley, Roy


Barnes, Michael
Dewar, Donald
Hazell, Bert


Barnett, Joel
Diamond, Rt. Hn. John
Healey, Rt. Hn. Denis


Beaney, Alan
Dickens, James
Heffer, Eric S.


Bellenger, Rt. Hn. F. J.
Dobson, Ray
Henig, Stanley


Bence, Cyril
Doig, Peter
Herbison, Rt. Hn. Margaret


Bennett, James (G'gow, Bridgeton)
Driberg, Tom
Hilton, W. S.


Bidwell, Sydney
Dunn, James A.
Hobden, Dennis (Brighton, K'town)


Binns, John
Dunnett, Jack
Hooley, Frank


Bishop, E. S.
Dunwoody, Mrs. Gwyneth (Exeter)
Horner, John


Blackburn, F.
Dunwoody, Dr. John (F'th &amp; C'b'e)
Houghton, Rt. Hn. Douglas


Blenkinsop, Arthur
Eadie, Alex
Howarth, Harry (Wellingboroug)


Boardman, H.
Edelman, Maurice
Howarth, Robert (Bolton, E.)


Booth, Albert
Edwards, Rt. Hn. Ness (Caerphilly)
Howell, Denis (Small Heath)


Boston, Terence
Edwards, Robert (Bilston)
Howie, W.


Bottomley, Rt. Hn. Arthur
Edwards, William (Merioneth)
Hughes, Rt. Hn. Cledwyn (Anglesey)


Bowden, Rt. Hn. Herbert
Ellis, John
Hughes, Hector (Aberdeen, N.)


Boyden, James
English, Michael
Hughes, Roy (Newport)


Braddock, Mrs. E. M.
Ensor, David
Hunter, Adam


Bradley, Tom
Evans, Albert (Islington, S.W.)
Hynd, John


Bray, Dr. Jeremy
Evans, Ioan L. (Birm'h'm, Yardley)
Irvine, A. J. (Edge Hill)


Brooks, Edwin
Fernyhough, E.
Jackson, Peter M. (High Peak)


Broughton, Dr. A. D. D.
Fitch, Alan (Wigan)
Jay, Rt. Hn. Douglas


Brown, Hugh D. (G'gow, Provan)
Fitt, Gerard (Belfast, W.)
Jeger, George (Goole)


Brown, Bob(N'c'tle-upon-Tyne,W.)
Fletcher, Raymond (Ilkeston)
Jenkins, Hugh (Putney)


Brown, R. w. (Shoreditch &amp; F'bury)
Fletcher, Ted (Darlington)
Jenkins, Rt. Hn. Roy (Stechford)


Buchan, Norman
Foley, Maurice
Johnson, Carol (Lewisham, s.)


Buchanan, Richard (G'gow, Sp'burn)
Foot, Sir Dingle (Ipswich)
Johnson, James (K'ston-on-Hull, W.)


Butler, Herbert (Hackney, C.)
Foot, Michael (Ebbw Vale)
Jones,Rt.Hn.Sir Elwyn(W.Ham,S.)


Butler, Mrs. Joyce (Wood Green)
Ford, Ben
Jones, J. Idwal (Wrexham)


Callaghan, Rt. Hn. James
Forrester, John
Judd, Frank


Cant, R. B.
Fowler, Gerry
Kelley, Richard


Carmichael, Neil
Fraser, John (Norwood)
Kenyon, Clifford


Carter-Jones, Lewis
Fraser, Rt. Hn. Tom (Hamilton)
Kerr, Dr. David (W'worth, Central)


Chapman, Donald
Freeson, Reginald
Lawson, George


Coe, Denis
Galpern, Sir Myer
Leadbitter, Ted


Coleman, Donald
Gardner, Tony
Ledger, Ron


Concannon, J. D.
Garrett, W. E.
Lee, Rt. Hn. Frederick (Newton)


Conlan, Bernard
Ginsburg, David
Lee, Rt. Hn. Jennie (Cannock)


Corbet, Mrs. Freda
Gray, Dr. Hugh (Yarmouth)
Lee, John (Reading)


Craddock, George (Bradford, S.)
Greenwood, Rt. Hn. Anthony
Lestor, Miss Joan


Crawshaw, Richard
Gregory, Arnold
Lever, Harold (Cheetham)


Cronin, John
Grey, Charles (Durham)
Lewis, Ron (Carlisle)




Lomas, Kenneth
Orbach, Maurice
Skeffington, Arthur


Loughlin, Charles
Orme, Stanley
Slater, Joseph


Luard, Evan
Oswald, Thomas
Small, William


Lyon, Alexander W. (York)
Owen, Dr. David (Plymouth, S'tn)
Snow, Julian


Lyons, Edward (Bradford, E.)
Owen, Will (Morpeth)
Spriggs, Leslie


Mabon, Dr. J, Dickson
Paget, R. T.
Steele, Thomas (Dunbartonshire.W.)


McBride, Neil
Palmer, Arthur
Stonehouse, John


MacColl, James
Pannell, Rt. Hn. Charles
Strauss, Rt. Hn. G. R.


Macdonald, A. H.
Park, Trevor
Swain, Thomas


McGuire, Michael
Parker, John (Dagenham)
Taverne, Dick


McKay, Mrs. Margaret
Parkyn, Brian (Bedford)
Thomas, George (Cardiff, W.)


Mackenzie, Gregor (Rutherglen)
Pavitt, Laurence
Thornton, Ernest


Mackie, John
Pearson, Arthur (Pontypridd)
Tinn, James


Mackintosh, John P.
Peart, Rt. Hn. Fred
Tomney, Frank


Maclennan, Robert
Pentland, Norman
Tuck, Raphael


MacMillan, Malcolm (Western Isles)
Perry, Ernest G. (Battersea, S.)
Urwin, T. W.


McMillan, Tom (Glasgow, C.)
Perry, George H. (Nottingham, S.)
Varley, Eric G.


McNamara, J. Kevin
Prentice, Rt. Hn. R. E.
Wainwright, Edwin (Dearne Valley)


MacPherson, Malcolm
Price, Christopher (Perry Barr)
Walden, Brian (All Saints)


Mahon, Peter (Preston, S.)
Price, Thomas (Westhoughton)
Walker, Harold (Doncaster)


Mahon, Simon (Bootle)
Price, William (Rugby)
Wallace, George


Mallalieu, E. L. (Brigg)
Probert, Arthur
Watkins, David (Consett)


Mallalieu,J.P.W.(Huddersfield,E.)
Randall, Harry
Watkins, Tudor (Brecon &amp; Radnor)


Manuel, Archie
Rankin, John
Weitzman, David


Mapp, Charles
Redhead, Edward
Wellbeloved, James


Marquand, David
Reynolds, G. W.
Whitaker, Ben


Marsh, Rt. Hn. Richard
Rhodes, Geoffrey
White, Mrs. Eirene


Mason, Roy
Roberts, Goronwy (Caernarvon)
Whitlock, William


Mayhew, Christopher
Roberts, Gwilym (Bedfordshire, S.)
Wigg, Rt. Hn. George


Mellish, Robert
Robertson, John (Paisley)
Wilkins, W. A.


Mendelson, J. J.
Robinson, W. O. J. (Walth'stow, E.)
Willey, Rt. Hn. Frederick


Mikardo, Ian
Rodgers, William (Stockton)
Williams, Alan (Swansea, W.)


Millan, Bruce
Roebuck, Roy
Williams, Alan Lee (Hornchurch)


Milne, Edward (Blyth)
Rogers, George (Kensington, N.)
Williams, Clifford (Abertillery)


Mitchell, R. C. (S'th'pton, Test)
Rose, Paul
Williams, Mrs. Shirley (Hitchin)


Moonman, Eric
Ross, Rt. Hn. William
Williams, W. T. (Warrington)


Morgan, Elystan (Cardiganshire)
Rowland, Christopher (Meriden)
Willis, George (Edinburgh, E.)


Morris, Alfred (Wythenshawe)
Rowlands, E. (Cardiff, N.)
Wilson, Rt. Hn. Harold (Huyton)


Morris, Charles R. (Openshaw)
Shaw, Arnold (Ilford, S.)
Wilson, William (Coventry, S.)


Moyle, Roland
Sheldon, Robert
Winnick, David


Murray, Albert
Shinwell, Rt. Hn. E.
Winterbottom, R. E.


Neal, Harold
Shore, Peter (Stepney)
Woodburn, Rt. Hn. A.


Newens, Stan
Short, Rt.Hn.Edward(N'c'stle-u-Tyne)
Woof, Robert


Norwood, Christopher
Short, Mrs. Renée(W'hampton,N.E.)
Wyatt, Woodrow


Oakes, Gordon
Silkin, Rt. Hn. John (Deptford)
Yates, Victor


Ogden, Eric
Silkin, Hn. S. C. (Dulwich)



O'Malley, Brian
Silverman, Julius (Aston)
TELLERS FOR THE AYES:


Oram, Albert E.
Silverman, Sydney (Nelson)
Mr. Harry Gourlay and Mr. John McCann.




NOES


Alison, Michael (Barkston Ash)
Carlisle, Mark
Fisher, Nigel


Allason, James (Hemel Hempstead)
Carr, Rt. Hn. Robert
Fletcher-Cooke, Charles


Astor, John
Cary, Sir Robert
Forrest, George


Atkins, Humphrey (M't'n &amp; M'd'n)
Channon, H. P. G.
Fortescue, Tim


Baker, W. H. K.
Chichester-Clark, R.
Foster, Sir John


Balniel, Lord
Clark, Henry
Fraser,Rt.Hn.Hugh(St'fford &amp; Stone)


Barber, Rt. Hn. Anthony
Clegg, Walter
Galbraith, Hn. T. G.


Batsford, Brian
Cooke, Robert
Gibson-Watt, David


Beamish, Col. Sir Tufton
Cooper-Key, Sir Neill
Giles, Rear-Adm. Morgan


Bell, Ronald
Costaln, A. P.
Gilmour, Ian (Norfolk, C.)


Bennett, Dr. Reginald (Gos. &amp; Fhm)
Craddock, Sir Beresford (Spelthorne)
Gilmour, Sir John (Fife, E.)


Berry, Hn. Anthony
Crawley, Aldan
Glover, Sir Douglas


Biffen, John
Crosthwaite-Eyre, Sir Oliver
Glyn, Sir Richard


Biggs-Davison, John
Crouch, David
Godber, Rt. Hn. J. B.


Birch, Rt. Hn. Nigel
Crowder, F. P.
Goodhart, Philip


Black, Sir Cyril
Cunningham, Sir Knox
Goodhew, Victor


Blaker, Peter
Currie, G. B. H.
Gower, Raymond


Body, Richard
Dalkeith, Earl of
Grant, Anthony


Bossom, Sir Clive
Dance, James
Grant-Ferris, R.


Boyd-Carpenter, Rt. Hn. John
Dean, Paul (Somerset, N.)
Gresham Cooke, R.


Boyle, Rt. Hn. Sir Edward
Deedes, Rt. Hn. W. F. (Ashford)
Grieve, Percy


Braine, Bernard
Digby, Simon Wingfield
Griffiths, Eldon (Bury St. Edmunds)


Brewis, John
Dodds-Parker, Douglas
Grimond, Rt. Hn. J.


Brinton, Sir Tatton
Doughty, Charles
Hall, John (Wycombe)


Brown, Sir Edward (Bath)
Douglas-Home, Rt. Hn. Sir Alec
Hall-Davis, A. G. F.


Bruce-Gardyne, J.
Drayson, G. B.
Hamilton, Marquess of (Fermanagh)


Bryan, Paul
du Cann, Rt. Hn. Edward
Hamilton, Michael (Salisbury)


Buchanan-Smith, Alick(Angus,N&amp;M)
Eden, Sir John
Harris, Reader (Heston)


Buck, Antony (Colchester)
Elliot, Capt. Walter (Carshalton)
Harrison, Brian (Maldon)


Bullus, Sir Eric
Elliott, R.W.(N'c'tle-upon-Tyne,N.)
Harrison, Col. Sir Harwood (Eye)


Burden, F. A.
Eyre, Reginald
Harvey, Sir Arthur Vere


Campbell, Gordon
Farr, John
Harvie Anderson, Miss







Hawkins, Paul
Macmillan, Maurlce (Farnham)
Rossi, Hugh (Hornsey)


Hay, John
Maddan, Martin
Royle, Anthony


Heald, Rt. Hn. Sir Lionel
Maginnis, John E.
Russell, Sir Ronald


Heath, Rt. Hn. Edward
Marples, Rt. Hn. Ernest
St. John-stevas, Norman


Heseltine, Michael
Marten, Neil
Sandys, Rt. Hn. D.


Higgins, Terence L.
Maude, Angus
Scott, Nicholas


Hill. J. E. B.
Maudling, Rt. Hn. Reginald
Sharples, Richard


Hirst, Geoffrey
Mawby, Ray
Shaw, Michael (Sc'b'gh &amp; Whitby)


Hobson, Rt. Hn. Sir John
Maxwell-Hyslop, R. J.
Sinclair, Sir George


Hogg, Rt. Hn. Quintin
Mills, Peter (Torrington)
Stainton, Keith


Holland, Philip
Mills, Stratton (Belfast, N.)
Steel, David (Roxburgh)


Hordern, Peter
Miscampbell, Norman
Stodart, Anthony


Hornby, Richard
Mitchell, David (Basingstoke)
Summers, Sir Spencer


Howell, David (Guildford)
Monro, Hector
Taylor, Sir Charles (Eastbourne)


Hunt, John
Morgan, Geraint (Denbigh)
Taylor,Edward M.(G'gow,Cathcart)


Hutchison, Michael Clark
Morrison, Charles (Devizes)
Taylor, Frank (Moss Side)


Iremonger, T. L.
Mott-Radclyffe, Sir Charles
Teeling, Sir William


Irvine, Bryant Godman (Rye)
Munro-Lucas-Tooth, Sir Hugh
Temple, John M.


Jenkin, Patrick (Woodford)
Murton, Oscar
Thatcher, Mrs. Margaret


Jennings, J. C. (Burton)
Nabarro, Sir Gerald
Tilney, John


Johnson Smith, G. (E. Grinstead)
Neave, Airey
Turton, Rt. Hn. R. H.


Johnston, Russell (Inverness)
Nicholle, Sir Harmar
van Straubenzee, W. R.


Jones, Arthur (Northants, S.)
Nott, John
Vaughan-Morgan, Rt. Hn. Sir John


Jopling, Michael
Onslow, Cranley
Vickers, Dame Joan


Joseph, Rt. Hn. Sir Keith
Orr, Capt. L. P. S.
Wainwright, Richard (Colne Valley)


Kerby, Capt. Henry
Orr-Ewing, Sir Ian
Walker, Peter (Worcester)


Kershaw, Anthony
Osborn, John (Hallam)
Walker-Smith, Rt. Hn. Sir Derek


Kimball, Marcus
Osborne, Sir Cyril (Louth)
Wall, Patrick


King, Evelyn (Dorset, S.)
Page, Graham (Crosby)
Walters, Dennis


Kirk, Peter
Page, John (Harrow, W.)
Weatherill, Bernard


Kitson, Timothy
Pearson, Sir Frank (Clitheroe)
Webster, David


Knight, Mrs. Jill
Peel, John
Wells, John (Maidstone)


Lambton, Viscount
Peyton, John
Whitelaw, Rt. Hn. William


Lancaster, Col. C. G.
Pike, Miss Mervyn
Wills, Sir Gerald (Bridgwater)


Langford-Hoit, Sir John
Pink, R. Bonner
Wilson, Geoffrey (Truro)


Legge-Bourke, Sir Harry
Pounder, Rafton
Wolrige-Gordon, Patrick


Lewis, Kenneth (Rutland)
Powell, Rt. Hn. J. Enoch
Wood, Rt. Hn. Richard


Lloyd, Ian (P'tsm'th, Langstone)
Prior, J. M. L.
Woodnutt, Mark


Lloyd, Rt. Hn. Selwyn (Wirral)
Quennell, Miss J. M.
Worsley, Marcus


Longden, Gilbert
Ramsden, Rt. Hn. James
Wylie, N. R.


Loveys, W. H.
Rawlinson, Rt. Hn. Sir Peter
Younger, Hn. George


McAdden, Sir Stephen
Rees-Davies, W. R.



MacArthur, Ian
Ronton, Rt. Hn. Sir David
TELLERS FOR THE NOES:


Mackenzie, Alasdair(Ross&amp;Crom'ty)
Ridley, Hn. Nicholas
Mr. Francis Pym and Mr. Jasper More.


Maclean, Sir Fitzroy
Ridsdale, Julian



Macleod, Rt. Hn. Iain
Roots, William

Clause added to the Bill.

New Clause No. 4.—(DUTIES OF COR PORATION AND MINISTER RELATING TO ORGANISATION.)

It shall be the duty of the Corporation, in formulating any recommendations to the Minister relating to the organisation of the activities that have fallen to be carried on under their ultimate control (whether by way of conclusions reported to the Minister under section 4 of this Act or otherwise) and of the Minister, in giving any general authority or direction to the Corporation or settling any general programme under section 4 of the 1949 Act as revived by this Act to have regard to—

(a) the need to secure the largest degree of decentralisation consistent with the proper discharge by the Corporation of their duties under the provisions of this Act and the 1949 Act as revived by this Act; and
(b) the need to secure competition between the publicly-owned companies by causing each such company, or group of publicly-owned companies if they are so organised, to operate as a separate trading unit, responsible for its own commercial performance and profitability.—[Mr. Barber.]

Brought up, and read the First time.

Mr. Barber: I beg to move, That the Clause be read a Second time.
Of all the new Clauses on the Order Paper, this is one of the most important, because it raises two issues which are basic to the operation of the new Corporation. I will first explain what the new Clause proposes and then outline the advantages that would flow from it. It imposes a duty on the Minister and the Corporation to have regard to
(a) the need to secure the largest degree of decentralisation consistent with the proper discharge by the Corporation of their duties under the provisions of this Act and the 1949 Act as revived by this Act; and
(b) the need to secure competition between the publicly-owned companies by causing each such company, or group of publicly-owned companies if they are so organised, to operate as a separate trading unit, responsible for its own commercial performance and profitability.
It is apparent that the wording of the new Clause is not in every sense watertight and that in other respects it may be too tightly drawn. However, the general purpose of what we have in mind is apparent.
The House will note that the wording of the new Clause is unusually modest, bearing in mind that it is put forward by a party which has very strong views on the question of decentralisation and competition. When I say that the new Clause is couched in modest terms, I am referring to the phrase "to have regard to" because this means that Parliament is not seeking to lay down either the degree of decentralisation or competition which may be appropriate in this case.
I would draw the attention of the House to Clause 33, which was added as a result of a discussion in Committee when the right hon. Gentleman realised that if he were to continue to resist he would be defeated by the combined votes of the Opposition and of a number of hon. Members who normally support the Government. In Clause 33 there appear the words—

It being Ten o'clock, further consideration of the Bill, as amended, stood adjourned.

Ordered,
That the Proceedings on the Iron and Steel Bill may be entered upon and proceeded with at this day's Sitting at any hour, though opposed.—[Mr. Gourlay.]

Bill, as amended (in the Standing Committee), further considered.

Mr. Barber: In Clause 33 we read:
In determining the location of its commercial and administrative offices, the Corporation shall have regard …
to certain factors there set out.
The Minister then took the view about the Clause, firstly, that the ultimate decision rested with the Corporation and, secondly, that it was an advantage to indicate in the Bill the wishes of Parliament. We have therefore carefully chosen the same operative words "to have regard to" in this Clause which, on the Minister's own interpretation, means that the Corporation will not be bound by these two criteria but that, again on the Minister's interpretation, it would be useful to have in the Bill some indication of Parliament's wishes.
Perhaps I could also say, with all due respect to the Organising Committee, that it is for Parliament to lay down the guide lines of the operation of the new nationalised industry. Indeed, the Minister has

already recognised this by the general duties that he has imposed on the Corporation and which are set out in Clause 3.
What we want to see is some decentralisation in the operation of the National Steel Corporation. It is not simply because we have before our very eyes examples of other centralised nationalised industries that have already clearly failed the nation, but because a number of important positive advantages would flow from decentralisation and a measure of competition. This, I repeat, is the first occasion on which the State is taking over a great manufacturing industry.
What are these advantages? First of all, the National Steel Corporation will be a mammoth organisation, with capital employed amounting to £1,300 million and with 278,000 employees. Whatever may be the wishes of right hon. Gentlemen opposite, it is really inconceivable that it could be organised in any way other than through a number of operating groups. That must be accepted.
That being the case, if there were to be a centralised monolithic organisation with all major decisions taken at the centre, the inevitable consequence would be to stultify enterprise and stifle initiative, yet it is just these two attributes, initiative and enterprise, that are crucial to an international manufacturing enterprise. This, I believe, is in itself sufficient for advocating the maximum amount of decentralisation, but there is another factor, and I hope that the whole House will think it a very significant factor, that should be taken into account.
In Section 3(1) of the Iron and Steel Act, 1949, which nationalised the steel industry before, the general duties of the Corporation are laid down. In paragraph 3 of the list of general duties there appear these words:
…to secure the largest degree of decentralisation consistent with the proper discharge by the Corporation of their duties under the preceding provisions of this section and under any other provision of this Act.
Mr. Speaker, you will see that these words, with one minor amendment necessary because of the passage of time—these words in the 1949 Act presented to Parliament by a previous Labour Government—are identical with the words in this new Clause. These significant words, indicating a decentralised industry, have for


some reason not apparent to me been omitted from the Bill before us.
The second advantage of the new Clause would be to make possible a measure of genuine competition between the constituent companies or groups of companies which together comprise the nationalised sector. One recognises that the overall planning would remain with the National Steel Corporation itself. No one suggests otherwise, but the establishment of competing units is the only possible way of ensuring that most decisions are taken on a strictly commercial basis. If the companies or groups of companies were treated as commercially viable entities responsible for their own commercial performance and their own profitability, this surely would create a spirit quite different from that which exists under the existing nationalisation set-up.
Thirdly, the breakdown of the National Steel Corporation into a number of competing units would provide a very real safeguard for the 200 smaller companies in the steel industry which are still to operate under the system of private enterprise. Many of these companies—for example, the rerollers—will be dependent on the National Steel Corporation for their raw material. Obviously it will be in their interest, and I believe in the national interest, for them to have the opportunity of buying from more than one supplier. An hon. Friend explained earlier that, unlike all the existing nationalised industries, the steel industry is a manufacturing industry where those who buy its products ought to be able, as it were, to shop around from one company to another to get the best bargain they can, be it a question of price—and we have advocated that there should be price competition in the industry—or quality, delivery or so on.
The fourth advantage of the new Clause would be to provide a large degree of decentralisation which would be advantageous for exports of steel. Anyone concerned with the export trade knows perfectly well the overwhelming importance of satisfying the overseas customer that he is in touch with a group or company with a known name where there are personal links and where problems and difficulties which inevitably arise in trade can be dealt with easily without having to go through some enormous head office.

This will be impossible if all the export business is done nominally through the headquarters of the National Steel Corporation.
Fifthly, there is the vitally important task of retaining the best men in the operating groups. I am sorry to have to say it, but it is a fact that many people in senior positions in the steel industry are already very dispirited by what the Government are proposing. For these people there are abundant opportunities in steel industries overseas, not to mention other private enterprises in this country. If this nationalised industry is to be in any way a success, it is absolutely vital that these men should be retained. The top men in this industry, or any industry, are attracted in the main by two incentives. The first is the opportunity to earn a high salary—there is nothing wrong with that—and the second is the opportunity to decide the future of the enterprise which they serve. If all really important decision-making is taken away from the operating companies or from the operating groups of companies and centralised in the headquarters of the Corporation, many of the top men in the industry will leave.
Sixthly and lastly, the one factor which has been largely lacking in the existing nationalised industries is the personal responsibility for financial results. However big the loss, the Treasury always stands ready to bail them out. By decentralising the organisation and by establishing competing groups it would be possible to instil a measure of financial discipline into a new nationalised industry which would be of immense value to the nation.
None of these advantages would detract from the obvious desirability of greater rationalisation in the industry. Indeed, hon. Gentlemen will recall that throughout I have referred, not merely to the operating companies, but to operating groups. We have seen one example of a group being formed in recent weeks even while the Bill has been going through the House of Commons.
Whatever the previous shortcomings of the industry may have been, they now all accept the need for rationalisation on the lines of the first Benson Report. The present Foreign Secretary has said on


behalf of the Government that competition is not the answer, but happily, he is no longer responsible for our economic affairs. If the Minister is not prepared to give his blessing to a considerable degree of decentralisation within the nationalised sector, I predict that, as the years pass, the steel industry of Britain, in the words of Aneurin Bevan, will indeed fail the nation.

Sir J. Eden: The whole House will have listened with a great deal of interest to what my right hon. Friend the Member for Altrincham and Sale (Mr. Barber) has said and will recognise as a result of his speech, if they had not already realised it, how very important the new Clause is. We believe that this goes to the very root of the whole issue now before the country as a result of the Government's decision to re-nationalise the industry.
We know, as most hon. Members opposite do, that many people had hoped that, since the Government had apparently decided, after very considerable hesitation and doubt on their part, to go ahead with renationalisation, they would use this as an opportunity for departing from the old formula of nationalisation. which has been tried and which has manifestly failed the nation. It was hoped that this would not simply be a rehash of all the old techniques and methods of nationalisation which have been shown to be very unsuited to the industries which have been taken into public ownership, which have denied to them a degree of flexibility which subsequent development has proved to be necessary, and which have brought to the people an intolerable burden.
It was hoped by all, by hon. Members on these benches as much as by those who are ardent supporters of nationalisation, that we should have some evidence of dynamic rethinking from the Government benches. Instead, so far we have had all the old stuff. We have had the rehash or the reincarnation of a former nationalisation Act.
All of us who were fortunate enough to serve on Standing Committee D will recollect the references made by my hon. Friend the Member for Yeovil (Mr. Peyton) to the horrible skeleton or bundle of bones he found in the cupboard.

10.15 p.m.

Mr. Peyton: My hon. Friend is doing me a great injustice. I never looked into any such dirty cupboard. I did not find these bones. What I think I did comment on was the obscenity of the Minister in attempting to give the kiss of life to dirty, dank, old statutory bones which he had found.

Sir J. Eden: I am much relieved, and I readily accept the correction of my hon. Friend if he was not guilty of any sleuthing or snooping after this unpleasant and horrible collection of bones. The fact remains that I am quite certain that everyone thought that this would not simply be a repetition of the old formula, that the Government genuinely intended to try to advance the interests of the community and especially help strengthen the economy of the country. But they have not done this. There is still a chance for them to have second thoughts. I believe that they may well be inclined to accept this new Clause, because, after all, it does go a very long way towards what is clearly now already moving within the industry, namely, a desire to form larger groups among those already engaged in it.
If one were to ask what is needed in the steel industry, many people would straight away hit on this point, that there should be fewer of the larger manufacturing units. Clearly, this is the view of the industry itself. This is certainly the view of the Benson Committee, so far as it has already gone in its investigation of the industry. This has already been assisted by the industry itself in the associations which it is currently engaged in effecting.
My right hon. Friend referred to one of them, the South Durham-Dorman Long-Stewart and Lloyds group. There is everything to be gained from this. It would strengthen the structure of the industry whilst, at the same time, preserving that element of competition which I believe to be absolutely essential.
Acceptance of this new Clause would give heart to all the main people concerned with the future of this industry: to those employed in it, to those who buy from it at home, and to those who buy from it abroad. I have no doubt at all that acceptance by the Government of this new Clause would give a


tremendous boost to the personnel engaged in the industry.
In company with some of my hon. Friends I had the opportunity, during the latter part of the Summer Recess, of visiting a number of steel works in this country. One of them, for example, was the Steel Company of Wales. Another one was Colvilles in Scotland. Wherever we went—I know that I am speaking also for my hon. Friends—we were struck by the immensely high calibre of the people employed in the industry, and also by their sense of devotion to the companies and to the industry for which they were working.
I am quite certain that the Government would not wish to destroy this spirit. I am quite certain they would not wish to take any action which would result in men of this calibre, of this stature, of this sense of devotion, leaving the industry. However, I greatly fear that if they persist in creating a single, monolithic structure and destroying the identification which these people may have with an individual company or group of companies, then the sort of movement out of the industry which my right hon. Friend envisaged will, all too regrettably, take place.
I hope that this will not be so. I am certain that for these people to wish to remain in the industry they must feel a sense of identification with the company or the group with which they are associating and must therefore have some kind of direct responsibility for the policies of that group. This is why I believe that some element of competition or freedom to determine the pricing and marketing arrangements of their own group of companies is so important.
Second, there is the question of customers at home. I wish only to add to what

my right hon. Friend said that I agree that it is extremely important for those who purchase from these companies that they should not be dependent upon one supplier. They must have an alternative source. This has been preached by hon. Gentlemen opposite in their anti-monopolistic speeches time after time and I absolutely agree with them. What they have applied against monopolistic power in private industry applies just as much and with almost greater emphasis when State money and public investment is involved, as it is here.
Third, there is the question of customers abroad. Those who have been buying from these companies overseas have come to value the service and the quality of the products of the companies with which they have been dealing. They have valued them not simply as British steel, but as British steel made and supplied by a particular company with a particular label. These companies have had their own overseas selling forces and they have established close personal links with their customers in overseas markets. It is most important that we do not destroy this, particularly at this juncture.
I think that they can be added to and strengthened. I agree very much that there is room for substantial amalgamation and regrouping. I am sure that this is important and that the National Steel Corporation can help to achieve it, with the assistance and advice of the Benson Committee and the organising committee. However, I beg the Government to ensure that, in future, there is not one single monolithic structure, but a number of groups free to compete among themselves. Only in that way will we get the really effective discipline out of which true benefit will come to the industry and to the country.

Mr. John H. Osborn: The debate on Second Reading and in Committee was preceded by the Benson Report, part of the theme of which, as well as rationalisation, was competition between various groups. On page 77, the Report says:
… discussion of rationalisation must above all proceed in terms of works.
This is the basis of the Amendment. Throughout Committee—I claim to be one of those who belong to "Club D"—we tried to find the object and policy of the Government in implementing the Second Reading decision to nationalise steel.
I have felt that the whole process of nationalisation has careered along madly in a vacuum. The objective has been clear—to nationalise steel—but the policy and what the industry should do when nationalised has been far from clear to the Opposition, to the steel industry and to the country. The justification for these comments is that the Organising Committee set up under Lord Melchett is working overtime to advise the Minister about what should be done.
There is a trend in this modern age for administrators and professional economists to attempt to determine from theory rather than practice what should happen in our industrial society. From time to time over the last 20 or 30 years there has been a trend in the private sector, let alone the public sector, to concentrate and centralise on the so-called need for rationalisation and efficiency. But ultimately there comes a time when centralisation results in over-centralisation and eliminates healthy competition and when conformity leads to mediocrity. Perhaps hon. Members opposite cannot accept this, but it has been the experience of many large private concerns. When they have reached mediocrity in a competitive age, they have had to do something about it or go out of business. We are discussing a Corporation which will be subsidised, if necessary, by the State. We are discussing a nationalised Corporation, which is something different.
Many management consultants would concede that centralisation may look tidy to the planner. It has its advantages. But the result for people, factories and

plant is that authority is ultimately taken from the manager and the manager feels frustrated, decision-making is taken from the shop floor and given to somebody in a head office and too frequently, not only the shop floor, but those in charge of it become so remote from the decision-making that they do not know what is going on. This has happened, and it could happen again.
Paragraph (b) of the new Clause refers to
the need to secure competition between the publicly-owned companies by causing each such company, or group of publicly-owned companies if they are so organised, to operate as a separate trading unit.…
There is a certain amount of uncertainty on many issues. We do not know whether, after nationalisation and the Report of the Organising Committee, there will be 14 separate units. But according to conclusion No. (xxxviii) in the Benson Report,
Six or seven integrated works and two or three large non-integrated steel-works could provide 28·8 million ingot tons.…
This is the prototype which certainly must be looked at by Lord Melchett.
It is reasonable to ask what the nation wants in terms of the future and the nationalised Steel Corporation. The tragedy is that far too many people in the country find the process of steel nationalisation something which they cannot understand or comprehend. I do not blame the large section of the population who feel that this is the affair of politicians and administrators and is nothing to do with them. The nation and Parliament want an efficient steel industry which is a commercial success. But what will promote that efficiency? If managers on the spot are not given a free hand and a certain amount of independence, far from promoting efficiency, exactly the reverse could result.
We have been discussing commercial accountability on other Amendments, ensuring that the activities of one works are not hidden in a large mass of accounts. Points were raised in Committee with particular reference to the National Coal Board and the gas industry. We want to measure sales, profits, and return on capital.
On the question of sales, at all times in the steel industry it is vital that there should be personal contact between the person or persons making steel and those buying it. Some coustomers have idiosyncrasies, and those idiosyncrasies are learned by certain suppliers. If the contacts between those supplying the steel and those buying it are broken, the suppliers will lose customers to others, perhaps overseas companies. This will have to be borne in mind in the steel industry. There is value, therefore, in these personal contacts, not only by the sales director but by the managing director of the company concerned. There is need to ensure that the customer can identify not only the product he is getting, but the person supplying it.
10.30 p.m.
To summarise, of course there must be good people in the steel industry, and they must not be driven away at factory level, and the one factor which will prevent this from happening is, giving them authority in their own works, and not to concentrate authority at the centre. To turn again to the need for rationalisation, rationalisation by no means conflicts with this new Clause. We are virtually careering down the corridor of nationalisation without a clear idea in Parliament as yet of what should be the correct balance between accountability to Parliament and commercial freedom. We have not decided—we did not on a previous new Clause—whether we should abandon the price structure under the 1953 Act or retain it. The Minister was remarkably elusive when we were on the previous Clause. We are not certain whether the Minister intends to have a monolithic structure, and whether the large Corporation is to be maintained. That is certainly indicated by the fact that the Minister is increasing the members of the Corporation by a subsequent Amendment, destroying, perhaps, the whole character of individual firms.
But to conclude, the buyer must know his source of supply and the people supplying him, and be able to identify his material with the manufacturing works supplying it. This is required by the customer whether at home or overseas, and by the industry itself. The new President of the Federation, Mr. Peech, is reported in the Steel Times of 6th

January as referring to the need for diversified industry, industry where units are competing against one another not only in terms of price but delivery, costs of production, methods of production, quality and service.
Therefore, I believe that it is in the national interest that the emphasis in the new Clause should be accepted, and I very much hope that the Joint Parliamentary Secretary to the Ministry of Technology, who, I think, will be replying, will bear this in mind and will, on behalf of the Government, accept it.

Mr. Hall-Davis: Without question, this new Clause, as my hon. Friend the Member for Sheffield, Hallam (Mr. J. H. Osborn) has said, goes to the heart of the future organisation of this vital industry. The discussion of the new Clause will, I hope, enable the Government, through the Joint Parliamentary Secretary, to remove some of the uncertainties, fears and hazards which must confront the industry at the present time. If I could make a general observation, before turning particularly to the arguments in favour of the new Clause, I would say to him, he is well qualified to appreciate the importance of what I am going to say and I hope that when we discuss the affairs of this industry—in the abstract, as it were—in this House, we shall not lose sight of the sheer scale of the changes which may be involved, and the immense importance of the industry, and that we shall not look upon this as a paper operation, or as a theoretical operation, but translate all our thinking in terms of its effect upon individuals, upon communities, and of what is practicable in changing the organisational structure within any given period.
That is one reason why both parts of the Clause are of vital importance to the steel industry and to the national economy. In what I am about to say, I accept the decision of the Second Reading of this House. The Clause presents an opportunity for the Minister to show, without any sacrifice of his political principle, that he is capable both of heeding the lessons of the past derived from our experience of nationalised industries, and of noting the current trend of organisation within industry, to which my hon. Friend the Member for Hallam has just referred.
If the right hon. Gentleman accepted the Clause or introduced one closely allied to it in another place, he would make a gesture which would not only encourage those engaged in the steel industry but put much needed new heart into the whole of British industry generally.
To those engaged in industry, it seems so often that Governments are immune against infection by new thinking which is producing changes in evolution in industry in the private sector. If Governments are not immune to new thinking, they give the impression, by inertia, that they are incapable of adjusting Government-controlled organisations in a way that translates the new thinking into policy and action.
At present, the trend of industrial thinking is simultaneously both towards larger units and towards decentralised decision taking and operational control. It has been found that once the benefits in terms of production of an optimum sized unit have been obtained—and they are often obtained in terms of production and marketing before they are obtained in fundamental research and development, though fortunately that is not a problem which faces this industry and its organization—a further aggregation in size is adverse and harmful and produces retrogressive effects rather than increased efficiency.
There is no doubt that, at present, people are becoming increasingly perturbed by the size of Government-established units of administration and operation. It is not something which relates only to the steel industry, and it is not something which has any particular political significance. It is a deep-seated feeling that we are beginning to lose the degree of control over our affairs that we ought to possess because we have allowed them to be grouped into units of activity which are too large for them to be controlled effectively by any collection of individuals.
The first part of the Clause, dealing with decentralisation, gives the Minister the opportunity to recognise and acknowledge the validity of that widespread national feeling. However, if he acknowledges the substance of the argument in favour of the first part of the Clause without also accepting the second part, which recognises the advantage of the

industry operating on a basis of formal competition, he will only seize half his opportunity. I want to stress this point, because I suspect that this may be the form of reply that we shall receive from the right hon. Gentleman or the Joint Parliamentary Secretary this evening. It will be easy to pay as it were lip-service or acknowledgement to decentralisation, but they will not be prepared to accept the more binding and formal commitment of agreeing that internal competition within the industry would be the best way of conducting its affairs.
It is, of course, possible to establish substitute criteria for measuring efficiency to replace the criteria of the profit and loss account and the flow of customer support, but I believe that it is neither easy nor entirely satisfactory. I appreciate that hon. Gentlemen opposite often express concern about certain aspects of a competitive economy. Some of them, I think, express concern about every aspect of a competitive economy, but on the whole there are few Members of the House who would deny that competition has its part to play in energising and stimulating the whole economy of the country.
There are few of us who would deny that there is, to a greater or lesser extent, a competitive instinct in all of us. This instinct is most satisfied when we can compete on a basis which is fairly and readily understood, and the basis which is generally recognised to be fair, and generally readily understood in industry, is when the competition exists commercially and industrially, and is measured by what is known as, I think, the traditional form, that is, not the completion of statistical tables, but of the profit and loss account, and the measurement of customer satisfaction through expanded sales.
I believe that the Clause would enable the Minister to have the best of both worlds, because there is nothing in the Clause which is taking away from the Minister control of what is sometimes described as the commanding heights of the economy, while at the same time enabling the individual units to compete against each other and to measure their relative progress and achievement with each other.
There are two other arguments strongly favouring the adoption of the Clause. The first one was referred to specifically by my right hon. Friend the Member for Altrincham and Sale (Mr. Barber), relating to exports, and I should like for a moment to touch on the more personal aspects of the export problem.
As a result of the Bill we shall have a State-owned steel industry competing overseas with undertakings which themselves are in the private sector. I believe that this will create difficulties—and we may as well acknowledge it in this House; we would be failing in our duty if we did not—which the industry will have to surmount in its relations with its overseas customers, because customers, many of them politically opposed to steel nationalisation, will be quick to blame any failure of service on bureaucratic over-centralisation and control, and minor failures of the kind which may be inevitable from time to time in all organisations, may be exaggerated and undue significance attached to them, with consequential damage to the Corporation's trading prospects.
Acceptance of the Clause and its implementation would, I believe, do much to protect the industry against this handicap on its export effort, and, similarly, the operation of the industry on the basis of separate groups in competition with each other, and presenting individual profit and loss accounts, would go a long way to set at rest resentment which may arise among the industry's overseas competitors and lead to difficulties, and prevent them having a suspicion that particular products are in some way enjoying an internal subsidy within the Corporation. Competitors would feel that the affairs of the industry were fully and frankly exposed if the basis of the Clause were adopted. This would be to the benefit of the industry in its export efforts.
I am sorry if I apear to have been following my brief somewhat carefully—it is my own—but I can assure hon. Members opposite that this subject is one in which every word should be carefully weighed, and I make no apology for doing so. [HON. MEMBERS: "Big business."] It is big business for the country that we should maintain steel exports.
10.45 p.m.
Lastly, and perhaps most important, I want to put a point to the Minister that I do not think will receive any more support from hon. Members opposite than that to which I have just been referring, but it should be said in the House—and it is the proper time to say it on Report—that the industry must be heartily sick of being fought over as a political battlefield, and that we, as politicians, should be not a little disturbed at our actions in subjecting the industry to this type of uncertainty over such a prolonged period.
It so happened that when I became a Parliamentary candidate—an unsuccessful one—20 years ago, the main political parties were debating the future of the steel industry, and it has been subjected to uncertainty ever since. It is the responsibility of those who have political control of the affairs of the industry, so far as possible, so to order its affairs and organisational structure that the largest possible segment of its operations and its direction should be cast in a pattern which removes them from the field of political controversy. I believe that a realistic appraisal of the Clause would show that it would have exactly this most desirable effect. It would cast the organisational structure of the industry into a pattern broadly acceptable to many whose political views differ from those of the Government.
I accept this. I am stating what I believe to be important, absolutely frankly. It would reduce the future pressure for change in the structure of the industry. It would also mean that changes of a political-economic nature which the nation may at some future time decide are in the best interests of the country could be effected with a minimum of disturbance. These are considerations which the Minister has a duty to the industry to take into account when determining the Government's attitude to the Clause.
To accept the Clause would in no way compromise the Government's principles, but it would hold out to the industry a hope of greater stability and of a less hazardous path ahead. For that reason it deserves the most careful consideration.

Mr. Edward M. Taylor: I want to say a few words in support of the Clause.


I was rather disappointed that the Minister has not yet intervened, because the implication is that he will not accept it. This will be very regrettable. I am afraid that throughout Committee attempts made by those on this side to improve the Bill were not treated with the respect they deserved. We appreciated throughout the proceedings then that the Bill was going to go through. There was little we could do about it, except to try to improve it, but when constructive attempts were made to remove the difficulties which we have seen in regard to other nationalised industries, they were rejected.
Here again we are trying to improve the structure of a nationalised industry in a way which does not lay any specific obligation upon the Minister, but merely lays an obligation on the Corporation in formulating its recommendations to the Minister, and if the passing of the Clause resulted in the Corporation presenting a pattern which the Minister did not like, at the end of the day the responsibility would still be his.
Apart from that, we are not proposing any rigid pattern. The Clause allows for great scope. From that point of view, too, the Government would be foolish to reject it. The Clause seeks to find a new way of overcoming some of the difficulties which have been experienced in other nationalised industries. One argument which has been advanced, and dealt with in detail by my hon. Friends, concerns the dispersal of decision making. The arguments for this are obvious and I need not repeat them, but obvious implications stem from them. If decision making is centralised, the implication clearly is that the top jobs will be centralised, and, unfortunately, from previous actions of the Government, we know where that centralisation will take place. It will almost certainly be in the Greater London area, and that is the kind of thing which is knocking the heart out of regional development. We have seen several examples from the Government and no doubt we shall see more.
The question of good will is neglected by many of the nationalised industries. What is not appreciated is that the moment the Corporation is set up, many customers, individuals and organisations will want to make representations of one

sort and another about the activities of the steel-manufacturing companies, and they will want to make those representations in the right places. How much better it will be for the good will of the steel organisations and the companies if these representations can be made locally, and if the decisions can be taken locally, and if the idea is generated that the people in the local works are those who take the decisions. This kind of good will is very important—and many of the nationalised industries lack good will.
It is also important for the morale of the staff for them to feel that the decisions are taken locally. I am afraid that if we have this form of centralisation, which is inevitable if the new Clause is not accepted, the morale could be as low as it is, unfortunately, in some of the other nationalised industries. The reputations of the individual companies are of real value. They have taken a long time to establish their reputations and we should be destroying much of value if we destroyed the companies and the existing groupings. Quite apart from the lower prices which we believe could come from fair competition between the groups, we must also have regard to the question of efficiency.
I have not put my name to the Clause because I have one slight reservation about it. While it is true that we want to encourage the maximum degree of competition, and while we know that this means lower prices and good service, the plain fact is that because of the activities of other nationalised industries, for Scotland fair competition is a nonstarter. That is true of certain of the steel-producing areas, of which Scotland is one. The reason is not inefficiency on the part of the Scottish steel industry. In some ways it is most efficient, particularly Colvilles. It is simply because of the price differentials which are imposed upon them by other nationalised industries.
Through your generosity, Mr. Deputy-Speaker, I shall have an opportunity later to deal with that in detail, but I hope that my right hon. and hon. Friends will bear in mind that while fair and free competition is splendid and can do nothing but bring benefits to all the people of this country and our customers abroad, it is impossible to have fair and free


competition when one section of that industry starts with a ball and chain round its feet. While I favour fair and free competition, therefore, I ask that this point be borne in mind.
I emphasise that this difficulty stems from other nationalised industries, from the policies which they adopt and their organisations, and we do not want to see that kind of mistake repeated in the new steel organisation. To that extent the Government would be well advised to accept the Clause and all that it implies. There is clearly a need for change and experimentation in a nationalised industry. Unfortunately, the Government have adopted a rigid and inflexible attitude which will be bad for the future of the industry. With the slight reservation that I have made, I urge the Government to accept the Clause.

Mr. Peyton: It is a pleasure to follow my hon. Friend the Member for Cathcart (Mr. Edward M. Taylor). I had noted with some disappointment that he had not put his name to this new Clause. I have had the privilege of his support for many Amendments I put down in Committee, and now on Report, I know the careful consideration he gives to these matters before deciding. I am always very grateful for the support I get from him.
I wish I could feel the confidence that one ought to feel following the almost unanswerable arguments deployed by my right hon. and hon. Friends, but I am afraid that the presence of the Parliamentary Secretary to the Ministry of Technology somewhat dislodges, if it does not destroy, my confidence. I do not believe for one moment that he is there to bring gaiety into our lives, or that a Government wholly given over to doctrine and musty dogma will depart from it and change their views—

Mr. Ridley: Does not my right hon. Friend agree that the position is even worse? We have two ex-Parliamentary Secretaries to the Ministry of Power, which is all that that Ministry appears to be able to muster.

Mr. Peyton: No, three. I am not quite sure what my hon. Friend meant by that suggestion. Assuming that it was not directed at me, I will revert to the observation I was about to make, that one of

the ex-Parliamentary Secretaries to the Ministry of Power was at least respectable. I speak entirely for myself. It would be kind to allow the hon. Gentleman the Parliamentary Secretary to the Ministry of Technology to escape into the recesses of that Ministry and have a veil drawn over his performance in Standing Committee D. Of course, here is an opportunity for him to cut loose and say that he will accept this very reasonable new Clause.
My hon. Friend the Member for Bournemouth, West (Sir J. Eden), in his very penetrating speech, reminded the House that during the Committee stage I had protested on more than one occasion against this kind of revivalist legislation which has been put before us—and a nasty sort of dog's dinner it is, too. The idea that Ministers can search the graves of old Statutes, disinterring them, reviving them and putting them before Parliament in the hope of cutting short discussion is something that I find wholly unacceptable, but it is a pity that, when given a chance of reviving one reasonably healthy piece of this otherwise revolting corpse, they should with contumely reject it.
I am sorry that I do not feel any great confidence that the Parliamentary Secretary to the Ministry of Technology will be minded on behalf of his ex-Ministry to accept this very reasonable new Clause, but I do believe that the virtues of competition and decentralisation which are enshrined in it should commend themselves even to the Parliamentary Secretary. I do not believe that when the Government came to wrestle with the problems of how to reorganise, run, manage a great industry such as iron and steel, they felt anything beyond a real shock at being lost by the problem with which they were confronted. It was so evident throughout the passage of the Bill that they did not have a vestige of an idea.
11.0 p.m.
Sometimes the Parliamentary Secretary got quite cross with the arguments put to him from the Opposition. He failed entirely to appreciate that what was worrying us throughout was that here was a Government hell-bent on a course which we believed to be a bad one, without having available, or even in an early stage of preparation, anything that could remotely be called a plan. This state of


affairs came ill from a collection of people who had been singing the virtues of planning for many years. I except honourably the hon. Member for Ebbw Vale (Mr. Michael Foot). I am quite certain that he has never thought of making a plan in his life.
I hope that the Government will make progress along the road to developing the iron and steel industry in a healthy manner and see fit to acknowledge the virtues of competition and decentralisation rather than adhering rigidly to some awful clap-trap about "the commanding heights of the economy". I hope that the Minister will have in mind some of the considerations mentioned by my hon. and right hon. Friends, that it is important to provide safeguards for the customers, important to give the publicly-owned industry the stimulus and discipline of competition, and also important that the remaining private sector should be comforted by the sight of continuing competition taking place within the publicly-owned industry.
I have been relieved from the duty of making a long speech on this new Clause because of the eloquence, the conciseness and quality of the arguments presented by my hon. and right hon. Friends. I do not see any need to go into it in detail, but I hope that if the Ministers are deaf to arguments presented in this House they will give ear to some of those who work in existing nationalised industries and many of those who work in the existing steel industry, upon whose good will they will be increasingly dependent. I hope that they will give weight to the requests of such people for decentralisation and their belief in competition, and also pay some respect to the wish, particularly of those in the steel industry to keep alive names and organisations which mean a great deal to many people.
I accept that this may be difficult for the Government because it will involve the swallowing of some rather indigestible words. They have abused this industry with every type of smear, charges of nepotism, being old-fashioned and the rest. They have castigated it continuously, but when they came to reorganise it, what were they driven to do? To get a chairman they had to go to the City and to get a No. 2 they had to go straight back to the industry

which they had been so busy chastising with very stupid words.
We are too hard-bitten by painful experience to believe that the Parliamentary Secretary is there for any purpose other than to reject valid argument with no good reason. That is an almost inevitable depressing experience to which my hon. and right hon. Friends have been too often exposed to be tender now.

Mr. Ridley: The Parliamentary Secretary to the Ministry of Technology is someone with whom we should sympathise. A week ago he thought that he had escaped from any further proceedings on the Bill. He must be very depressed to find himself again having to answer with his known hesitation these important debates upon the nationalisation of steel.

Dr. Bray: On the contrary, they could not keep me away.

Mr. Ridley: We now have three Parliamentary Secretaries to the Ministry of Power on the Treasury Bench. All in due course will join "the Bray drain". I have no doubt that the hon. Gentleman will be extremely pleased to have escaped into the safe confines of the Ministry of Technology.
It is extraordinary that there is no decision in the minds of the Government about the organisation of the industry following nationalisation. For 13 years hon. Members opposite have been crying for the nationalisation of this great industry. They have had all this time in the wilderness to think out how they were to achieve it. Yet time and time again they say, "This is a point for the Organising Committee. This is a point for Lord Melchett to settle. We cannot say what the answer will be. We have not made up our minds about pricing policy, about the grouping of the companies, about anything at all".
The hon. Member for Ebbw Vale (Mr. Michael Foot) and others will know the noble Lord, Lord Melchett, to be no great disciple of Keir Hardie, no great descendant of the fathers of Socialism. Yet it is he, aided by Mr. Macdairmid, that very able steelmaster, who will take these decisions. It is absolutely preposterous that the Labour Party, having for so long prayed nationalisation in aid as the solution to all our industrial problems, should lamely come before the House


and spend £580 million of the taxpayers' money in order to nationalise this great industry but yet say, "We have no idea whatsoever of the form we would like it to take upon nationalisation". What a pathetic admission of failure. What a pathetic admission of lack of homework, of lack of forethought, of the lack of any attempt during those 13 years to solve this problem.

Mr. Deputy Speaker (Sir Eric Fletcher): Order. The hon. Gentleman seems to be wandering a little from the terms of the Clause.

Mr. Ridley: The main choice in accepting the Clause or rejecting it is whether we are to create a monolithic industry controlled from the centre with each of its dependent works or establishments simply appendages, or whether we are to create a series of competing groups controlled no doubt as to the ground rules by the Corporation. The Clause seeks to set up competing groups. This is a structure of nationalised industry which has been tried before in the previous steel nationalisation Act. I believe it to be about the only worthwhile comparison, because all the other nationalised industries are service industries, with the exception of the coal industry, which is an extractive industry. This is the first manufacturing industry. So there are few precedents as to whether the monolithic solution or the competing solution is the right one.
It is marvellous and wonderful that the Labour Government have not made up their minds on this. It is impossible in a nationalised industry to match the ultimate degree of competitive efficiency which forces of competition, the fear of bankruptcy, and the market, can induce in the managers of the industry. But in setting up this great productive monolith, we must try to get as much competition, as much discipline, as much pressure upon managers as we can.
If there are troubles in industry, if there is inefficiency and slackness, it is the fault of the managers, of the bosses. The only way to get better performance from them is to put them in a position in which they have to do better or go under. The main task is to eliminate the sloppiness of management caused by the cosy conditions

which slack financial discipline brings about.
There is considerable inefficiency in many sectors of private industry, but the examples in nationalised industry are probably worse still, and the need ultimately is for the managers to be able to get tough. I was a boss, an industrial manager, for ten years, and the hardest thing I ever had to do was to sack people. It is the most unpleasant and most difficult part of being a boss. But it is the essential part of running a business efficiently. We must induce in the managers of the future nationalised steel industry the need and the ability to dispense with the services, perhaps, of their friends and of people who work for them when they are failing to do as they should.
The nearest we can come to this ideal is by making the various elements in the steel industry compete one against the other, making the financial disciplines which we put upon the industry strong enough to embolden managers to chance their arm, to risk their reputation, to fail or to succeed, because they are forced to by the conditions which we create.
The main defect of British industry is the lack of competition. A few months ago, I asked a Swede what he thought was wrong with British industry, and he replied: "Whether it be private or nationalised industry, the trouble with you in Britain is that you have not been made to compete, you have not had the full weight of the competitive pressures which we in this Socialist State of Sweden have fought against for years. If you made yourselves compete, you would force yourselves to be more efficient". As we slide gradually down the slope into the industrial backwardness of inefficiency, it is not the time to start making national steel corporations which, if anything, will tend to lessen the pressure for competitive efficiency, but, rather, it is the time to devise ways by which we can make the nationalised industries compete and, therefore, perhaps become more efficient.
In the Coal and Steel Community we should have to adopt the grouping solution. For our own benefit, from the point of view of industrial efficiency and managerial responsibility, we need it, too. From the point of view of trade marks and the reputation of the companies acquired over the years, we need it, too.


But there is a further reason why we should adopt the competing group solution, a reason which, perhaps, will not appeal to hon. Members opposite. In a year or two, when they leave office, we shall have to put the country's economy right again, and one of the first things to do will be to denationalise the steel industry. The more that the party opposite integrates it into one, the more difficult will that legislation be. That, therefore, is an added reason why the industry should be left in groups, so that it can more easily be disentangled when the disastrous flirtation with Socialism has come to an abrupt and unhappy end.

11.15 p.m.

Mr. John Nott (St. Ives): Financial control of the public sector is one of the greatest problems facing all Governments, and this new Clause does a great deal of good in drawing attention to this problem. The steel industry, as has been mentioned, is different in many respects from the other nationalised undertakings and I want to draw attention to only one aspect of this matter.
Wherever there are trading activities in the other nationalised industries—one might take the brickwork division of the National Coal Board, British Railways hotels and the showrooms of the electricity and gas industries—they are competing with a large number of firms in the private sector. But when the steel industry is nationalised, only about 10 per cent. of the steel industry will be left in the private sector and therefore the situation will be very different. For this reason—and it is only one of the reasons—it will be essential to maintain some form of competition within the industry itself.
Groupings within the industry have been mentioned. It is important that these groupings should not be one-product groupings, say, of strip or sheet. The obvious grouping which the layman might think of is the grouping which is neat and tidy and is a one-product grouping. What my hon. Friends and I are envisaging is a grouping which would contain a whole range of products so that one integrated steel grouping would compete with another integrated steel grouping. That is the form of competition which we seek.
In the excellent White Paper on the Financial and Economic Obligations of the Nationalised Industries the criteria suggested of a selected return on capital employed, is possibly the only means in the case of a monopolistic activity that can be used in order to decide whether a nationalised industry is efficient or not. But here where we have an opportunity of competition within a nationalised industry and this seems to me to be a far better method of ensuring efficiency.
May I make one suggestion which was not made in Committee and has not been made in the House tonight? It is a bit off-beat, but I hope the Minister and the Parliamentary Secretary will forgive me for that because occasionally a bit of radicalism from this side of the House should not offend the party opposite. One of the things which a nationalised undertaking lacks is the capital disciplines which are available within the private sector—not the same capital disciplines anyway. At the same time it would be easy in the case of a nationalised undertaking to create a form of capital discipline and encourage competition without in any way letting control fall out of the hands of the Government. The way in which this could be done is through a variant of the method which Professor Morgan suggested as far back as the Radcliffe Committee's Report in 1959 and which Professor Edwards, Chairman of the Electricity Council, has touched upon. Professor Edwards is in favour of the area electricity boards borrowing part of their capital on the open market to maintain the form of capital discipline which we on this side of the House would wish.
If, assuming this Measure goes through and the Bill becomes law, the Minister could consider the issue of a form of participating preference stock in the nationalised undertaking. This would mean that control of the nationalised undertakings remained wholly in the hands of the Government. There would, however, be a preference security with a coupon, say, of 4 per cent. yielding far less than gilt-edged stock and, therefore, cheaper for the Government and the Treasury to service; but it would have a participating element which would be geared to the profits of the underlying


steel grouping. Therefore, while maintaining nationalisation there could be a cheap form of security for the Treasury to service and in it there would be an element of participation which would provide an incentive for companies to compete with one another for capital in the market.
Moreover it would be a way of attracting savings out of the private sector into the public sector, and one of the fundamental difficulties we have now in creating competition for capital within the public sector is lack of a suitable security where the investor has a hedge against inflation. In the private sector the small saver can invest in an equity but there is no hedge against inflation available to investors in the public sector.
I believe that the public sector badly needs some way of attracting savings. The method I have suggested would provide a capital discipline, competition for capital within the public sector, and at the same time it would provide an equity hedge for the small investor who wanted to invest in the public sector.
I only take this as an off-beat suggestion, but it has been made in a different way by the Chairman of the Electricity Council, an ex-economist, and by Professor Morgan in the Radcliffe Committee. If we are seeking competition this might be one way in which competition could be maintained for capital in the public sector.
Finally, may I say that what we really seek here is competing groupings and a wide range of products for these competing groupings which is essential under the Treaty of Paris and the High Authority's Regulations. That I am sure will only be maintained if the Minister is prepared to see different prices between one grouping and another, but that returns to pricing policy which we have already debated once tonight.

Mr. Geoffrey Wilson: I want to intervene merely to reinforce a remark made by my hon. Friend the Member for Yeovil (Mr. J. Peyton). He suggested that we could learn something about the difficulties of over-centralisation from the nationalised industries. I think I am the only hon. Member of the House—certainly the only hon. Member on this side

—who served in a nationalised industry both before and after it was nationalised.
I am not going to enlarge on the difficulties of over-centralisation which arose in the early days of railway nationalisation. They are pretty well known, but what is not so well known is that there were over-centralisation problems before rail nationalisation. For a short time I was the representative of the Great Western Railway on the Solicitors Committee of the Railway Clearing House Committee. That Committee had a representative from each of the four main line companies, plus a member from London Transport, and the five of us met together and had to consider certain legal matters of common interest to the railways. From time to time we had to refer matters back to our respective Boards.
I vividly recollect that when anything had to be referred back, the London, Midland and Scottish representative used to push back his chair and tell the rest of us to get on with it because he could not be certain of getting any decision from his Board within a reasonable time. The reason was that while the other railways and particularly the Great Western Railway were highly decentralised so that not so much responsibility was thrown upon the centre, the London, Midland and Scottish was very highly centralised, which caused delay in decision-making at the top.
On a comparatively minor matter of a legal decision of common interest to the railways, the London, Midland and Scottish used to take an unnecessarily long time in coming to a decision, and the other railways, which were more decentralised, could do it much more quickly.
I think lessons like that could be learned from examination not only of the nationalised industries but from some of the big corporations and that it would be found that there are very considerable advantages in a high degree of decentralisation.

Mr. Kenneth Lewis: I want to make just two points which I do not think have been made so far in the debate. I am not absolutely certain that in asking for decentralisation, as we are, we are not baying for the moon. I am not sure that, under this monolithic organisation


which is going to be set up, this will be possible. But if the Minister really does want decentralisation of this industry, he might seriously consider that it is in his own interests that there should not be over-centralisation at the centre in London. I suggest that the headquarters of the Corporation should be outside London. This would get it away from the Ministry. Particularly with this Government, the danger is that the Ministry would smother the activities of the Corporation, however much it wants to encourage it to act in a businesslike way and be profitable.
I am not sure that competition will be possible, especially if, as the Minister indicated earlier, he intends to encourage the Corporation to play a large part in fixing prices. If there is to be competition between separate companies, it must be on the basis of their being encouraged to be profitable, and this means their competing with each other in administrative efficiency and, particularly, in productivity.
The labour in this industry is paid by results and under a different formula in different companies. It is important that this should be preserved and that the companies should be encouraged by the Corporation to make their own deals with their own labour. If the Minister is prepared to consider competition as a whole, I hope that he will take into account the effect upon labour and the productivity which the industry has always had from the special wage rates which it has negotiated.
In discussing the Benson Report and grouping, I hope that the result will not be what happened in the industry in the inter-war years. Grouping is now being generally accepted as necessary, but its danger is that it leads to rationalisation. There was rationalisation of the industry before the war and it ran into trouble. The result was the closing of certain plants and a failure to develop. The industry was totally unequipped to deal with the heavy demands which came with the war.
Whatever reductions there may be in the demand for steel, neither the Minister nor the Corporation should precipitately close down or reduce production. In the long run, the industry will have demands from free enterprise in-

dustry, and from other nationalised industries. One hopes that it will also be able to create a demand in overseas markets.

Dr. Bray: Those of us who enjoyed the experience of Standing Committee were used to the alternation of positively embarrassing embraces and chill whiffs of grape which was such a feature of it. The hon. Member for Yeovil (Mr. Peyton) was less than his usual generous self when he said that we on this side were not intensely interested in many of the points of hon. Gentlemen opposite. When we discuss these general problems of the industry and can forget some of the dogma of public or private enterprise, we achieve some of our best debates on industrial problems.
There is a difficulty with the Clause, as the right hon. Member for Altrincham and Sale (Mr. Barber) appreciated when he referred to Clause 33, now standing in the Bill. I would particularly remind the hon. Member for Glasgow, Cathcart (Mr. Edward M. Taylor), who was so gratified with this, that his last remark on that Clause was:
… one has to admit that the Amendment"—
that is, Clause 33, as it stands—
does not really say a great deal at all."—[OFFICIAL REPORT, Standing Committee D, 14th December, 1966; c. 2414.]
Many of the valuable things which have been said in the debate are not, perhaps, adequately expressed in the new Clause.
11.30 p.m.
A number of points was made by the hon. Member for Altrincham and Sale and other hon. Members, first, on decentralisation. Clearly, any organisation as big as the Corporation would have to work through operating groups. The right hon. Gentleman urged the maximum degree of decentralisation, possibly even down within the management of the groups. However, he did not question, and I do not think that anyone would, that there are major functions which must be exercised centrally in such an organisation, such as the control of investment and the assessment of major investment projects.
No one in the steel industry feels that it should be without a pricing policy, and


this must be the concern of the Corporation. The hon. Member for Rutland and Stamford (Mr. Kenneth Lewis) correctly dwelt on the importance of labour relations and methods of trade union bargaining. While it is true that there must be scope for great improvement at the works level, there are many parts of the industry which come nowhere near the standard of others. We hope that there will be a central responsibility for raising the standard of labour negotiations all round.
The question of competition in pricing was raised. The steel industry is unique in that it is very highly capital-intensive and suffers great fluctuations of demand. In this situation, as the industry learnt through bitter experience in the twenties and thirties, unregulated price competition forces it into operating prices well below the level of total costs, down to somewhere near marginal costs at all times, and it is unable to service its capital, unable to modernise and unable to keep techniques of production up to date.
That is accepted as being true by steel companies not only in this country but overseas, and there are various attempts at managed price systems. I do not think that the right hon. Member for Altrincham and Sale suggested that we should have totally unregulated price competition between the operating groups, and he would agree that it is a matter of balance as to what can be achieved. It may be that competition on quality, services to customers, and the type of technical service provided to the customers' processes will be more effective than uninhibited price competition.
The next point was the question of advantage to exports. If there is unregulated price competition and a natural wish of each operating group to maximise its own profits, it is not clear that exports would benefit. If we want to export efficiently we must export from the most efficient works, and they must meet export demand when possibly it would be more profitable for them to compete in the home market with another company which is already fully taken up in that market. The position in the lighter end of the industry is well known to hon. Members opposite in that connection.
The industry is not now over-sentimental about the advantages of retaining company names. It appreciates the

advantage in the Dorman Long—South Durham—Stewarts and Lloyds merger of naming the holding company of the group "Dorman Long and Company". But the names of South Durham and Stewarts and Lloyds as independent operating companies have been cheerfully abandoned in favour of greater operating efficiency in that group.

Sir S. Summers: Is the hon. Gentleman saying that a decision has already been taken that the three companies he has named will not sell products under the names under which they have traditionally sold them?

Dr. Bray: Certainly not. I was distinguishing the question of naming groups from the degree of independence of those groups. The question of decentralisation is entirely separate from the question of naming in which clearly there is great advantage in meeting the wishes of people at all levels in the industry. There has been no decision made on such a question as that.
From the point of view of the attraction of independence in operating groups, particularly for the top men, there are great differences of remuneration of directors, for example, between the 14 companies in the industry. There are very great differences of morale on different boards. There is perhaps not a complete evenness of quality on the boards. Is this a matter in which the Corporation should take no interest? I do not think there are many people on the boards of steel companies who would expect this to be the case.
In Committee we had a valuable debate on the question of personal responsibility for financial results. Certainly it is the Government's intention to ensure that the financial management—the system of budgetary responsibility of individual groups—gives as great a degree of responsibility as possible to the operating management on the spot. But the objectives which have been put forward by the Opposition, in which we have a great deal of sympathy, would not be served by pressing this Amendment. There are other organisational objectives just as desirable—for example, the avoidance of multitudinous layers of management.
Hon. Members on both sides agree that the rationalisation of the management structure of the Coal Board, reducing the number of control levels from five


to three, is a highly desirable organisational improvement. It may be that the dogma to over-centralise or decentralise would proliferate the management levels in the steel industry.
When we start considering the organisation of these groups, the theoretical questions about whether they should be multi-product groups, regional groupings, or whatever they may be, tend to disappear. When we see the organisation of the Corporation, hon. Members opposite will appreciate that many of their points have been listened to with interest and have been taken into consideration.

Mr. Barber: I am grateful to the Joint Parliamentary Secretary for what he said, although I found it singularly unconvincing. He referred to Clause 33 and prayed it in aid of his argument. I cannot understand this. He agreed with us that the Clause did not achieve very much. The purpose of my reference to that Clause and of adopting the operative words of it and importing them into this new Clause was so that we would not tie the Corporation dogmatically to any particular mode of operation. I said that I wished to do no more than was done in Clause 33, namely, to provide guidelines for the new nationalised industry. This is a perfectly reasonable thing for Parliament to do, and yet the hon. Gentleman never dealt with that point.
The Parliamentary Secretary said that he did not think that it was right that we should have "totally unregulated price competition between the operating companies". But nobody has suggested

that. We all realize—it is in conformity with the new Clause—that the Corporation, acting as a form of holding company, would have the last say. But what we suggest in the Clause is that there should be some element of competition between the various operating companies or the groups which we hope will be formed. No more than that. This new Clause, indeed, does not impose even that upon the Corporation. All it says is that the Corporation and the Minister shall have regard to these important desiderata. Then finally the hon. Gentleman talked about decentralisation; but of course, he did not deal with the point which I raised, that the very words which are included in this paragraph of this new Clause are words taken from the nationalising Statute of 1949.

Well, we have had, I think, a useful debate on this important matter. The last thing I want to do at this stage is to be offensive to the Joint Parliamentary Secretary to the Ministry of Technology, but I am bound to tell him that I can hardly conceive of a less convincing reply than that we have had this evening. However, it is all we can expect from him. If we pursued this debate any further we should not, I suppose, get any more out of him. In all these circumstances I must advise my right hon. and hon. Friends to divide in favour of this new Clause.

Question put, That the Clause be read a Second time:—

The House divided: Ayes 221, Noes 273.

Division No. 235.]
AYES
[11.42 p.m.


Alison, Michael (Barkston Ash)
Brewis, John
Cunningham, Sir Knox


A Mason, James (Hemel Hempstead)
Brinton, Sir Tatton
Currie, G. B. H.


Astor, John
Brown, Sir Edward (Bath)
Dalkeith, Earl of


Atkins, Humphrey (M't'n &amp; M'd'n)
Bruce-Gardyne, J.
Dance, James


Awdry, Daniel
Bryan, Paul
Dean, Paul (Somerset, N.)


Baker, W. H. K.
Buchanan-Smith, Alick(Angus,N&amp;M)
Deedes, Rt. Hn. w. F. (Ashford)


Balniel, Lord
Buck, Antony (Colchester)
Digby, Simon Wingfield


Barber, Rt. Hn. Anthony
Bullus, Sir Eric
Dodds-Parker, Douglas


Batsford, Brian
Burden, F. A.
Doughty, Charles


Beamish, Col. Sir Tufton
Campbell, Gordon
Douglas-Home, Rt. Hn. Sir Alec


Bell, Ronald
Carlisle, Mark
Drayson, G. B.


Bennett, Dr. Reginald (Gos. &amp; Fhm)
Carr, Rt. Hn. Robert
du Cann, Rt. Hn. Edward


Berry, Hn. Anthony
Cary, Sir Robert
Eden, Sir John


Biffen, John
Channon, H. P. G.
Elliot, Capt. Walter (Carshalton)


Biggs-Davison, John
Chichester-Clark, R.
Elliott, R.W.(N'c'tle-upon-Tyne,N.)


Birch, Rt. Hn. Nigel
Clark, Henry
Eyre, Reginald


Black, Sir Cyril
Clegg, Walter
Farr, John


Blaker, Peter
Cooke, Robert
Fisher, Nigel


Body, Richard
Costain, A. P.
Fletcher-Cooke, Charles


Bossom, Sir Olive
Crawley, Aldan
Fortescue, Tim


Boyd-Carpenter, Rt. Hn. John
Crosthwaite-Eyre, Sir Oliver
Foster, Sir John


Boyle, Rt. Hn. Sir Edward
Crouch, David
Fraser,Rt.Hn.Hugh(St'fford &amp; Stone)


Braine, Bernard
Crowder, F. P.
Galbraith, Hn. T. G.




Gibson-Watt, David
Kitson, Timothy
Quennell, Miss J. M.


Giles, Rear-Adm. Morgan
Knight, Mrs. Jill
Ramsden, Rt. Hn. James


Gilmour, Ian (Norfolk, C.)
Lambton, Viscount
Rawlinson, Rt. Hn. Sir Peter


Gilmour, Sir John (Fife, E.)
Lancaster, Col. C. G.
Rees-Davies, W. R.


Glover, Sir Douglas
Langford-Holt, Sir John
Renton, Rt. Hn. Sir David


Goyn, Sir Richard
Legge-Bourke, Sir Harry
Ridley, Hn. Nicholas


Godber, Rt. Hn. J. B.
Lewis, Kenneth (Rutland)
Ridsdale, Julian


Goodhart, Philip
Lloyd, Ian (P'tsm'th, Langstone)
Roots, William


Goodhew, Victor
Lloyd, Rt. Hn. Selwyn (Wirral)
Rossi, Hugh (Hornsey)


Gower, Raymond
Longden, Gilbert
Royle, Anthony


Grant-Ferris, R.
Loveys, W. H.
Russell, Sir Ronald


Gresham Cooke, R.
Lubbock, Eric
St. John-Stevas, Norman


Grieve, Percy
MacArthur, Ian
Sandys, Rt. Hn. D.


Griffiths, Eldon (Bury St. Edmunds)
Maclean, Sir Fitzroy
Scott, Nicholas


Hall, John (Wycombe)
Macleod, Rt. Hn. Iain
Sharples, Richard


Hall-Davis, A. G. F.
Macmillan, Maurice (Farnham)
Shaw, Michael (Sc'b'gh &amp; Whitby)


Hamilton, Marquess of (Fermanagh)
Maddan, Martin
Sinclair, Sir George


Hamilton, Michael (Salisbury)
Maginnis, John E.
Smith, John


Harris, Reader (Heston)
Marples, Rt. Hn. Ernest
Stainton, Keith


Harrison, Brian (Maldon)
Marten, Neil
Stodart, Anthony


Harrison, Col. Sir Harwood (Eye)
Maude, Angus
Summers, Sir Spencer


Harvey, Sir Arthur Vere
Mawby, Ray
Taylor, Sir Charles (Eastbourne)


Harvie Anderson, Miss
Maxwell-Hyslop, R. J.
Taylor,Edward M.(G'gow,Cathcart)


Hastings, Stephen
Mills, Peter (Torrington)
Taylor, Frank (Moss Side)


Hawkins, Paul
Mills, Stratton (Belfast, N.)
Teeling, Sir William


Heald, Rt. Hn. Sir Lionel
Miscampbell, Norman
Temple, John M.


Heath, Rt. Hn. Edward
Mitchell, David (Basingstoke)
Thatcher, Mrs. Margaret


Heseltine, Michael
Monro, Hector
Tilney, John


Higgins, Terence L.
More, Jasper
Turton, Rt. Hn. R. H.


Hill, J. E. B.
Morgan, Geraint (Denbigh)
van Straubenzee, W. R.


Hirst, Geoffrey
Morrison, Charles (Devizes)
Vaughan-Morgan, Rt. Hn. Sir John


Hobson, Rt. Hn. Sir John
Mott-Radclyffe, Sir Charles
Vickers, Dame Joan


Hogg, Rt. Hn. Quintin
Munro-Lucas-Tooth, Sir Hugh
Wainwright, Richard (Coine Valley)


Holland, Philip
Murton, Oscar
Walker, Peter (Worcester)


Hordern, Peter
Nabarro, Sir Gerald
Walker-Smith, Rt. Hn. Sir Derek


Hornby, Richard
Neave, Airey
Wall, Patrick


Howell, David (Guildford)
Nicholls, Sir Harmar
Walters. Dennis


Hunt, John
Nott, John
Weatherill, Bernard


Hutchison, Michael Clark
Onslow, Cranley
Webster, David


Iremonger, T. L.
Orr, Capt. L. P. S.
Wells, John (Maidstone)


Irvine, Bryant Godman (Rye)
Orr-Ewing, Sir Ian
Whitelaw, Rt. Hn. William


Jenkin, Patrick (Woodford)
Osborn, John (Hallam)
Wilson, Geoffrey (Truro)


Johnson Smith, G. (E. Grinstead)
Page, Graham (Crosby)
Winstaniey, Dr. M. P.


Johnston, Russell (Inverness)
Page, John (Harrow, W.)
Wolrige-Gordon, Patrick


Jones, Arthur (Northants, S.)
Pearson, Sir Frank (Clitheroe)
Woodnutt, Mark


Jopling, Michael
Peel, John
Worsley, Marcus


Joseph, Rt. Hn. Sir Keith
Peyton, John
Wylie, N. R.


Kerby, Capt. Henry
Pike, Miss Mervyn
Younger, Hn. George


Kershaw, Anthony
Pink, R. Bonner



Kimball, Marcus
Pounder, Rafton
TELLERS FOR THE AYES:


King, Evelyn (Dorset, S.)
Powell, Rt. Hn. J. Enoch
Mr Anthony Grant and Mr. Francis Pym.


Kirk, Peter
Prior, J. M. L.





NOES


Abse, Leo
Broughton, Dr. A. D. D.
Delargy, Hugh


Albu, Austen
Brown, Rt. Hn. George (Belper)
Dell, Edmund


Allaun, Frank (Salford, E.)
Brown, Hugh D. (G'gow, Provan)
Dewar, Donald


Alldritt, Walter
Brown,Bob(N'c'tle-upon-Tyne,W.)
Diamond, Rt. Hn. John


Allen, Scholefield
Brown, R. W. (Shoreditch &amp; F'bury)
Dickens, James


Anderson, Donald
Buchan, Norman
Dobson, Ray


Archer, Peter
Buchanan, Richard (G'gow, Sp'burn)
Doig, Peter


Armstrong, Ernest
Callaghan, Rt. Hn. James
Driberg, Tom


Atkins, Ronald (Preston, N.)
Cant, R. B.
Dunn, James A.


Atkinson, Norman (Tottenham)
Carmichael, Neil
Dunnett, Jack


Bacon, Rt. Hn. Alice
Carter-Jones, Lewis
Dunwoody, Mrs. Gwyneth (Exeter)


Bagier, Gordon A. T.
Chapman, Donald
Dunwoody, Dr. John (F'th &amp; C'b'e)


Barnes, Michael
Coe, Denis
Eadie, Alex


Barnett, Joel
Coleman, Donald
Edelman, Maurice


Beaney, Alan
Concannon, J. D.
Edwards, Robert (Bilston)


Bence, Cyril
Conlan, Bernard
Edwards, William (Merioneth)


Bidwell, Sydney
Corbet, Mrs. Freda
Ellis, John


Binns, John
Craddock, George (Bradford, S.)
English, Michael


Bishop, E. S.
Crawshaw, Richard
Ennals, David


Blackburn, F.
Cronin, John
Ensor, David


Blenkinsop, Arthur
Crosland, Rt. Hn. Anthony
Evans, Albert (Islington, S.W.)


Booth, Albert
Crossman, Rt. Hn. Richard
Fernyhough, E.


Boston, Terence
Cullen, Mrs. Alice
Fitch, Alan (Wigan)


Bottomley, Rt. Hn. Arthur
Dalyell, Tam
Fitt, Gerard (Belfast, W.)


Boyden, James
Davidson, Arthur (Accrington)
Fletcher, Raymond (Ilkeston)


Braddock, Mrs. E. M.
Davies, Dr. Ernest (Stretford)
Fletcher, Ted (Darlington)


Bradley, Tom
Davies, G. Elfed (Rhondda, E.)
Foley, Maurice


Bray, Dr. Jeremy
Davies, Harold (Leek)
Foot, Sir Dingle (Ipswich)


Brooks, Edwin
Davies, Robert (Cambridge)
Foot, Michael (Ebbw Vale)







Ford, Ben
McCann, John
Roberts, Albert (Normanton)


Forrester, John
MacColl, James
Roberts, Goronwy (Caernarvon)


Fowler, Gerry
Macdonald, A. H.
Roberts, Gwilym (Bedfordshire, S.)


Fraser, John (Norwood)
McGuire, Michael
Robertson, John (Paisley)


Fraser, Rt. Hn. Tom (Hamilton)
McKay, Mrs. Margaret
Robinson, W. O. J. (Walth'stow, E.)


Freeson, Reginald
Mackenzie, Gregor (Rutherglen)
Rodgers, William (Stockton)


Galpern, Sir Myer
Mackie, John
Roebuck, Roy


Gardner, Tony
Mackintosh, John P.
Rogers, George (Kensington, N.)


Garrett, W. E.
Maclennan, Robert
Rose, Paul


Ginsburg, David
MacMillan, Malcolm (Western Isles)
Ross, Rt. Hn. William


Gourlay, Harry
McMillan, Tom (Glasgow, C.)
Rowland, Christopher (Meriden)


Gray, Dr. Hugh (Yarmouth)
McNamara, J. Kevin
Rowlands, E. (Cardiff, N.)


Greenwood, Rt. Hn. Anthony
Mahon, Peter (Preston, S.)
Ryan, John


Gregory, Arnold
Mahon, Simon (Bootle)
Shaw, Arnold (Ilford, S.)


Grey, Charles (Durham)
Mallalieu, E. L. (Brigg)
Sheldon, Robert


Griffiths, Will (Exchange)
Mallalieu,J.P.W.(Huddersfield,E.)
Shore, Peter (Stepney)


Hale, Leslie (Oldham, w.)
Manuel, Archie
Short, Rt.Hn. Edward (N'c'stle-u-Tyne)


Ham ling, William
Mapp, Charles
Silkin, Rt. Hn. John (Deptford)


Hannan, William
Marquand, David
Silkin, Hn. S. C. (Dulwich)


Harper, Joseph
Marsh, Rt. Hn. Richard
Silverman, Julius (Aston)


Harrison, Walter (Wakefield)
Mayhew, Christopher
Silverman, Sydney (Nelson)


Hart, Mrs. Judith
Mellish, Robert
Skeffington, Arthur


Haseldine, Norman
Mendelson, J. J,
Slater, Joseph


Hattersley, Roy
Mikardo, Ian
Small, William


Hazell, Bert
Millan, Bruce
Steele, Thomas (Dunbartonshire,W.)


Heffer, Eric S.
Milne, Edward (Blyth)
Stonehouse, John


Henig, Stanley
Mitchell, R. C. (S'th'pton, Test)
Strauss, Rt. Hn. G. R.


Hobden, Dennis (Brighton, K'town)
Moonman, Eric
Swain, Thomas


Hooley, Frank
Morgan, Elystan (Cardiganshire)
Taverne, Dick


Horner, John
Morris, Alfred (Wythenshawe)
Thomas, George (Cardiff, W.)


Houghton, Rt. Hn. Douglas
Morris, Charles R. (Openshaw)
Thornton, Ernest


Howarth, Robert (Bolton, E.)
Morris, John (Aberavon)
Tinn, James


Howie, W.
Moyle, Roland
Tomney, Frank


Hughes, Roy (Newport)
Murray, Albert
Tuck, Raphael


Hunter, Adam
Neal, Harold
Urwin, T. W.


Irvine, A. J. (Edge Hill)
Newens, Stan
Varley, Eric G.


Jackson, Peter M. (High Peak)
Norwood, Christopher
Wainwright, Edwin (Dearne Valley)


Jenkins, Hugh (Putney)
Oakes, Gordon
Walden, Brian (All Saints)


Jenkins, Rt. Hn. Roy (Stechford)
Ogden, Eric
Walker, Harold (Doncaster)


Johnson, Carol (Lewisham, S.)
O'Malley, Brian
Wallace, George


Johnson, James (K'ston-on-Hull, w.)
Oram, Albert E.
Watkins, David (Consett)


Jones,Rt.Hn.Sir Elwyn(W.Ham,S.)
Orme, Stanley
Watkins, Tudor (Brecon &amp; Radnor)


Jones, J. Idwal (Wrexham)
Oswald, Thomas
Weitzman, David


Judd, Frank
Owen, Dr. David (Plymouth, S'tn)
Wellbeloved, James


Kelley, Richard
Owen, Will (Morpeth)
Whitaker, Ben


Kenyon, Clifford
Paget, R. T.
White, Mrs. Eirene


Kerr, Dr. David (W'worth, Central)
Palmer, Arthur
Wigg, Rt. Hn. George


Lawson, George
Park, Trevor
Willey, Rt. Hn. Frederick


Leadbitter, Ted
Parker, John (Dagenham)
Williams, Alan (Swansea, W.)


Ledger, Ron
Parkyn, Brian (Bedford)
Williams, Alan Lee (Hornchurch)


Lee, Rt. Hn. Frederick (Newton)
Pavitt, Laurence
Williams, Clifford (Abertillery)


Lee, Rt. Hn. Jennie (Cannock)
Peart, Rt. Hn. Fred
Williams, Mrs. Shirley (Hitchin)


Lee, John (Reading)
Pentland, Norman
Williams, W. T. (Warrington)


Lestor, Miss Joan
Perry, Ernest G. (Battersea, S.)
Willis, George (Edinburgh, E.)


Lever, Harold (Cheetham)
Perry, George H. (Nottingham, S.)
Wilson, William (Coventry, S.)


Lewis, Ron (Carlisle)
Prentice, Rt. Hn. R. E.
Winnick, David


Lomas, Kenneth
Price, Christopher (Perry Barr)
Woodburn, Rt. Hn. A.


Loughlin, Charles
Price, William (Rugby)
Woof, Robert


Luard, Evan
Probert, Arthur
Wyatt, Woodrow


Lyon, Alexander W. (York)
Randall, Harry
Yates, Victor


Lyons, Edward (Bradford, E.)
Redhead, Edward



Mabon, Dr. J. Dickson
Reynolds, G. W.
TELLERS FOR THE NOES:


McBride, Neil
Rhodes, Geoffrey
Mr. William Whitlock and Mr. Ioan L. Evans.

New Clause 6.—(ARM'S LENGTH TRADING.)

(1) In the event of the Corporation or any publicly-owned company or any subsidiary thereof or any company in which the Corporation has acquired or holds any interest or any company in respect of which the Minister or Corporation has given directions or exercised control pursuant to the powers given by this Act entering into contracts or legal relationships of any kind with public corporations or statutory bodies or government departments whether for the purposes of production, sale, purchase or research or any activity or class of business whether concerned with iron and steel or otherwise, each and every party thereto shall conduct itself upon the assumption that

the relationship which exists between them is solely that of offeror and offeree and so that neither party shall gain any advantage from the fact that each party is a public body in any matter relating to the transfer, exchange, purchase or sale of equipment or raw materials or of any matters relating to production or the management of their respective concerns.

(2) Insofar as the Corporation enters into such relationships as are mentioned in the above subsection with the companies under its control or in which it holds an interest the parties thereto shall conduct themselves upon the same principles as stated in the above subsection but so that any saving or economy which arises solely by virtue of the common administration and financial control inherent


in the administrative structure of the Corporation pursuant to this Act shall be permissible insofar as such saving or economy is in the public interest.—[Mr. Patrick Jenkin.]

Brought up, and read the First time.

Mr. Patrick Jenkin: I beg to move, That the Clause be read a Second time.
I say to the hon. Gentleman at the outset that I move this Clause in a spirit of inquiry, and purely to probe the Government's intentions. We have no intention of dividing the House on it.
During the Committee stage we had a very full and interesting debate on the financial objectives of the Corporation on an Amendment moved by the hon. Member for Poplar (Mr. Mikardo), who said a number of interesting things. In particular, he wanted to water down the financial objective which was written into the Bill. He said:
One objective which one may have is a certain amount of egalitarian redistribution of income and wealth, which, of course, is much affected by what we do in the financial duties which we lay upon the Corporation."—[OFFICIAL REPORT, Standing Committee D, 1st December, 1966; c. 1582.]
That was the hon. Gentleman's objective.
Fortunately, he was given very short shrift indeed by the then Parliamentary Secretary to the Ministry of Power, who, in perhaps one of the most important speeches made during the whole of the Committee stage, reaffirmed conclusively and without any shadow of doubt that it was the Government's intention that the Corporation should be run on strictly commercial lines. The Parliamentary Secretary to the Ministry of Technology said:
I say at once that we regard the Iron and Steel Corporation as it will be set up as a commercial enterprise."—[OFFICIAL REPORT, Standing Committee D, 1st December, 1966; c. 1634.]
He then talked about the purely commercial environment in which the industry must operate and about clear management objectives, long-term marginal costs, and similar concepts, all of which came as some comfort to the Opposition but which must have been somewhat depressing to the hon. Member for Poplar.
It was a very important speech, and it is our hope that it will be borne out in practice, because it is of crucial importance that a Corporation of this sort—the first major incursion by the State into

manufacturing industry—should operate on strictly commercial principles. But we believe that the mere statement of financial objectives is not enough to secure that by itself, and that it needs to be strengthened. The Clause provides one method of strengthening the Government's intention to run the new Corporation in this way.
The broad purpose of the Clause can be summed up in its heading: "Arm's length trading". I cannot do better to summarise the intentions of the Clause than to read again from the document produced at the beginning of last year by the Confederation of British Industry, dealing with the question of arm's length trading. On page 14, dealing with the criteria for competition between nationalised and private enterprise, it says:
(1) Trading with other nationalised industries, other public bodies and Government Departments should be conducted at arm's length, otherwise the measurement of costs returns will not be true. 
(2) Trading with a parent nationalised industry or with authorities within it should be at arm's length, and this should not be so construed as to prevent the taking advantage of economies, if any, resuling from common financial control, common higher management or the provision of common central services. Central services should be fully costed so as to include overheads and charged accordingly.
That is exactly what the Clause is designed to achieve.
We recognise that in the form in which the Clause is at present drafted it is too stark and uncompromising and restrictive, and there may well be cases which would justify a divergence from the strict principle laid down in the Clause. For this reason we do not intend to press the matter. For instance, the scrap agreement which the industry has operated would be in clear contravention of the Clause.
But there are two other aspects of the matter. One is the question of the Corporation in iron and steel activities, vis-à-vis the private sector of the industry, and the other is the question of diversifying the interests of the Corporation. Dealing with the private sector, it has been said over and over again by the Government —and referred to again this evening—and I quote from paragraph 37 of the White Paper, that
The Government regard it as important that the private sector should have a healthy


and efficient life of its own and so make a full contribution to the national economy.
The Minister started by discounting the fears that the private sector felt, but in the end he has accepted Amendments and new Clauses intended to protect the private sector.
The concept behind the Clause, of arm's length trading between the Corporation and its own subsidiaries, provides an added safeguard which the private sector would like to see. On the question of diversification, it is essential that the Corporation should deal with other public bodies strictly at arm's length, with a relationship that is strictly commercial. There should be no hidden subsidising and, above all, no cross-subsidisation, because there is no more certain way of blurring management objectives—which the Government desire to obtain in Committee. None of this must arise out of the mere fact that there is common public ownership.
When it takes over Dorman Long the Corporation will own a very substantial part of the constructional engineering industry, representing about 40 per cent. of the total United Kingdom capacity.
12 m.
A large part of the works, particularly bridge building, will be constructed for public authorities, many of which are in development areas. It would be easy to suggest that it would be in the public interest for the National Steel Corporation to put up bridges in the development areas at a cheaper price than that for which the corporation would be prepared to do it in a non-development area. It could be argued that this was in the interest of promoting employment. This is exactly the sort of thing that must be avoided, otherwise one very quickly slips into a morass of confused objectives and cross-subsidisation, and therefore a blurring of the results and the figures by which alone the performance of an industry of this sort can be determined.
It goes further. The Clause also refers to purchase. There must be no question of a subsidised energy supply or subsidised transport for the benefit of the steel industry or any of its constituent parts. If the principle of the Clause is accepted by the Government—I am not asking them to accept the Clause in its exact terms—there is no reason why it

should not equally extend to other nationalised industries, so that all their trading should be at arm's length. I recognise that there may be exceptions. We have written in the exception of savings which are truly attributable to common ownership. That is a legitimate saving to make. That is done all the time.
But the Clause sets out the attitude which a great many people in industry feel is essential if we are to have the right commercial atmosphere in which the nationalised industries will operate. In this industry in particular, the first major manufacturing industry to be nationalised, it is more essential than ever that it should operate and be seen to operate in a strictly commercial framework, and to ensure that it always trades between its own parts and with other public authorities at arm's length, with no possibility of cross-subsidy or anything of that sort, is one way to make sure that this happens.
I hope that when he replies the Minister will give some indication of the Government's thinking on this matter. The Confederation of British Industry has stated this as one of the most important forms of ensuring fair competition between the public and private sectors. I hope that the Government will be forthcoming on this, although it may not be possible for them to accept this Clause.

Mr. Freeson: I start by telling the hon. Member for Wanstead and Woodford (Mr. Patrick Jenkin) that there is no question of my doing other than repeat the view which has been expressed by my predecessor—that we should operate the steel Corporation and the steel industry on a strictly commercial basis. It is not for me to go into the details this evening on how the industry will be organised. There is to be no Division on the Clause, but in any event we could not accept the Clause as set out because it attempts to lay down to some degree, and in certain respects, the detailed organisation of the industry, which at present is a matter of study by the Organising Committee and will be the subject of a report to my right hon. Friend.
I should spell out the position which we take. Trading between the nationalised steel industry and Government


Departments and other public corporations will normally be at arm's length, as the hon. Member put it, and any departure from this might well be contrary to Clause 3 which seeks to avoid undue preference or undue discrimination between customers.
On the question of the relationship between the different component parts of the industry itself, when it comes to be organised in different groups or companies within it, there is much to be said for the view that the diversified activities of the nationalised steel industry should be organised into concerns separate from the iron and steel interests and that trading between the two interests or the various concerns and the Corporation should normally be on an arm's length basis. The Minister has already brought this point to the notice of the Organising Committee, and he will have the advantages of this possibility and the question of arm's length trading very much in mind when he receives the report of the Organising Committee in due course.
As I have indicated, to try to deal with the subject on the lines suggested by the new Clause would be contrary to the general principle of not trying to lay down in the Bill the Corporation's organisation in detail on a statutory basis. That would introduce an element of rigidity which could have serious disadvantages. A number of major steel companies, including those with large diversified interests, have organised their diversified activities into separate companies. Others have kept them with their steel production. Moreover, even where there are separate companies some trade at arm's length from the rest of the group to which they belong and others do not.
It will be necessary when the time comes to take decisions on the organisation of the industry to weigh the various advantages of separation against certain practical disadvantages that can arise. It would not be right at this stage to start spelling these out in a statutory sense. There may, indeed, be circumstances in which it would be in the national interest for trading between different sectors of the Corporation to take place on a basis other than that of arm's length. This is not unknown. One example has been quoted—the scrap metal deal—but there are other situations in which this could

arise in other aspects of the country's economy. We must allow for the possibility in the steel industry, but I want to give the general assurance that what was said in Committee is the view of the Government, and will be the normal basis on which the steel industry will operate.

Mr. Patrick Jenkin: I should like, with the leave of the House, to thank the Parliamentary Secretary for that forthright reply. He has stated quite clearly that it will be the normal practice for the Corporation to trade at arm's length with other public authorities and with its own diversified interests. That goes a very long way to meeting the objectives of the Clause.
We should like at some time to see this set out, perhaps, in a White Paper, or in some other form in which it could be referred to, so that if there were any cases where private competitors felt that there was something not in accordance with the policy which the hon. Gentleman has stated they would have a clear statement of intention to point to. As it is, they have the debates and what has already been said by the hon. Gentleman and his predecessor in Committee, which goes a long way to meeting the case.
The hon. Gentleman or the Minister might at some stage consider—perhaps after the report under Clause 4 and produced by the Organising Committee has been determined—producing a White Paper setting out in detail the trading methods that it is intended the Corporation should follow. That would go a good deal further to reassure opinion. However, I have indicated that we do not intend to press the new Clause to a Division, so I beg to ask leave to withdraw the Motion.

Motion and Clause, by leave, withdrawn.

Mr. Marsh: I beg to move, That further consideration of the Bill, as amended, be adjourned.
This is perhaps a surprisingly early stage in the proceedings to move this Motion, but we have made progress this evening, although not so much as I would have liked. We have had a serious discussion and we had an all-night sitting on Tuesday. Any group of men and women who undertake to run the affairs


of the country properly ought to be able to run their own affairs by finishing about midnight.

Question put and agreed to.

Bill, as amended, to be further considered this day.

FOOT-AND-MOUTH DISEASE (NORTHUMBERLAND)

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Charles R. Morris.]

12.10 a. m.

Viscount Lambton: Early yesterday morning I had some very harsh words with the Minister of Agriculture. This was the cause of some regret to me, because I had been what I like to think a friend of his over the years. I therefore thought that it would be only right and fair to the House to explain why I expressed myself so plainly.
To do so I shall have to go back and relate the dealings that I have had with the Minister since the start of this affair. Foot-and-mouth disease was first diagnosed in the area on 18th August last year. From the very beginning I naturally had the very greatest concern over the matter. I understood from a casual conversation which I had with the Minister that it was his intention to have an inquiry when the outbreak was over. As a result of this I made two speeches in my constituency, in both of which I clearly stated that I had seen the Minister and I asked those in the audience to reserve their judgment because he had assured me that later there would be an inquiry.
During the whole period of the outbreak very great fears and doubts were expressed to me about the method being used to combat the disease. Nevertheless, I made no public reference whatever to these doubts, presuming that there was to be an inquiry. I waited until November, but by then it became apparent that no inquiry was being publicly spoken of. I therefore put down a Question on 15th November. I received an emphatic reply from one of the Joint Parliamentary Secretaries that there was not to be an inquiry because that was unnecessary. As a result I found myself in an awkward position. I had kept silent about my doubts because I

believe that there was to be an inquiry. If there was not to be an inquiry there seemed no alternative but for me to use publicity to see that the feelings of my constituents were aired and that the mistakes were brought out into the open in order to ensure that they should not occur again.
I do not deny that I have used publicity to this end. I will not deny that I shall continue to do so, because I am still of the opinion that the very gravest mistakes were made by the Minister and certain of his officials during the outbreak. A very large number of the Ministry officials worked most unsparingly and without any consideration for their own comfort towards bringing the outbreak to an end. They deserve the very greatest of thanks.

Mr. W. E. Garrett: I am indeed grateful that the noble Lord has in a way retracted some of the damaging parts of the public statements he has made, particularly in the northern Press. His constituents were involved and he was right to use all methods of publicity, but I am glad that he has made this partial withdrawal, because I believe that he made a tactical error in attacking the officials.

Viscount Lambton: I make no retraction whatsoever. All I am doing is praising the majority of officials. At the same time, as I shall explain, I would to the utmost of my ability condemn the action of certain other officials.
The Minister chose to say yesterday morning that I had brought no evidence before him. I want to deal with that assertion. I went to see the Minister before Christmas. I conceived that it was to be a private meeting. Instead, I was met with the full array of the Civil Service—by the Minister, by the Chief Veterinary Officer, by the chief civil servant in the Ministry, and by a gentleman whose time seemed to be devoted to taking notes. I told the Minister of the very grave doubts which I had and asked for an inquiry. At this meeting the Minister conveyed to me that certain of the statements that I had made could in certain circumstances be considered libellous. If the Minister wishes to get information from Members of Parliament visiting him, such an announcement is not one which will encourage them to give him their confidence.
However, after Christmas I was by no means satisfied with the situation. I therefore wrote a letter to the Minister in which I asked him if it would be possible for me to see two veterinary officers—Mr. Pickering and Mr. Weir—and ask them certain questions which I thought might put my doubts at rest. I received a letter towards the end of December, dated in rather original fashion for a Ministry, in that it was merely dated "December", with no specific date being given.

The Minister of Agriculture, Fisheries and Food (Mr. Fred Peart): So was yours.

Viscount Lambton: Then we are equal. The Minister repaid my compliment. Is the Minister's letter to me dated? If so, what date is on it?

Mr. Peart: I shall deal with that.

Viscount Lambton: There was no date upon the letter I had, but this is largely irrelevant. I received this letter saying that it was to be put before the Minister at the earliest opportunity. The next thing I knew was when I received a letter from the Minister, which was dated 4th January, in which no mention whatsoever was made of my request to see Mr. Pickering and Mr. Weir. I therefore did not believe that my reasonable request had been granted.
Shortly after that, and in some ways as a result of it, I called a public meeting in Rothbury. No sooner had I done so than I received a telephone message from the Private Secretary to the Minister in which he brought to my attention the fact that, though the Minister in his letter had said nothing about my request, he did not want me to understand that he was averse to my seeing Mr. Pickering and Mr. Weir. Indeed, he told me that he would be ready to do so as long as the Minister himself was present. This seemed a most singular request, that a Minister should insist upon being present at a routine discussion between a Member of Parliament and two veterinary officers. But I do not want to make too much of this, because I regard the personal relationship between ourselves as largely irrelevant to the two main issues. The two main issues are: was the outbreak effectively combated, and was there adequate prevention of its spread?
I have no doubt that mistakes were made, and the original mistake was made by Dr. Wilsdon on the 19th when he decided to decline to accept the analysis which had been made by Mr. Easingwood and Mr. Pickering that it was an outbreak of foot-and-mouth disease. As a result of this error, the standstill was taken off on the 19th, and an open mart was held at Rothbury on the following Thursday, with the distribution of, perhaps, infected cattle around the countryside.
It is impossible to say that this spread the disease, but, at the same time, it is impossible to say that it did not. An inquiry would bring out whether or not it is satisfactory for veterinary officers to go entirely by the results which come out of the veterinary service at Pirbright. The all-clear was given on the Tuesday, after one test, when the third test proved positive. With all deference, I consider that this is a matter into which we could look with advantage.
The next matter is the inefficiency with which the contractors worked. One contractor who was employed in this outbreak told me that he was simply told to get men to do the jobs which came before the killing, the penning and so on. He told me that the only men he could get were in many cases unemployable. At the public meeting in Rothbury, he declared that at no time was he asked to put any supervision over those unemployable men. This should be inquired into.
Next, the delay in burial. On two farms certainly, at Dancing Hall and at Wandylaw, the cattle were killed and then were laid out for a period of up to two days without being disinfected. For all we know, birds may well have spread the infection. We must look very carefully into an organisation which kills without immediately disposing of the animals killed.
The contractors were not adequately supervised. Here is a statement given to me by a farmer, Mr. Hall, of Newham Buildings, whose cattle were killed:
The Ministry should get its priorities right about human disinfecting. My workmen (who had not been near the infected animals) had to bath and change into clean clothing. The contractor's men, as far as I could see, were coming and going for four days without changing or bathing. The Ministry of Agriculture technical officer produced six new pairs of


overalls for the men. These were not used, and eventually were put into one of my sheds and retrieved by the Ministry weeks afterwards. I was asked by the V.O. Mr. Bolton to wear protective clothing and go with him to Newham Village Farm. He did not wear protective clothing and went into the infected field with Mr. Laws, the contractor's foreman, who also did not wear protective clothing. The rules were stringently applied to my men and I, and apparently ignored by the Ministry and through them the contractors.

Mr. Garrett: rose—

Viscount Lambton: If the hon. Member will forgive me, I should like to get on.
I should like to add a quotation by Mr. Johnson and Mr. Young, of Dancing Hall. They said:
The contractor's men due to lack of supervision were not efficient. Their organisation broke down so badly the beasts were left lying unburied for two days. You could smell them in our cottages. We were confined to the farm, but the contractor's men were coming and going with the same clothes that they were handling the infected animals.

Mr. Peart: May I have an opportunity to reply to the hon. Member? The custom is that we divide the Adjournment time half and half.

Viscount Lambton: I have nearly finished. I have dealt with the cruelty. I should like to say one thing before I sit down about the personality of Dr. Wilsdon. In a speech he accused me—

Mr. Garrett: On a point of order, Mr. Deputy Speaker. This is unfair. The hon. Member is referring to individuals who cannot defend themselves in this Chamber, and I think it is unworthy of the hon. Member to attempt to make allegations against people at this stage of the debate.

Mr. Deputy Speaker (Sir Eric Fletcher): That is not a point of order. The Minister will have an opportunity to reply in due course.

Viscount Lambton: If the hon. Member would not take up so much of my time I would be able to finish. I do not think that officials should make such statements. I asked the Minister whether he had given authority. He said he had not.
The right hon. Gentleman is asking for time, and I shall give it to him with pleasure. I conclude by saying that

many things have changed since 1928, not least the methods of killing. Cannot more humane methods of killing be introduced to avoid the atrocities that I have mentioned? At the same time, can it be right for contractors to be employed without supervision, thus spreading the disease, while the farmers themselves are confined to their farms? All this adds up to the need for inquiry which I hope the Minister will set in motion.

12.28 a.m.

The Minister of Agriculture, Fisheries and Food (Mr. Fred Peart): I welcome this debate, and I shall reply to some of the allegations made by the hon. Member in the short time at my disposal.
I am glad that after throwing so many wild allegations at me and my Department on the radio, television and in the Press, the hon. Member for Berwick-upon-Tweed (Viscount Lambton) has come face to face with me in the House. I have said publicly that I am not prepared to argue with him at a distance.
I shall repeat the facts. Just before Christmas the hon. Member came to see me and I undertook to examine the points that he put to me. Whilst I was engaged on this, he wrote immediately after Christmas saying that he was dissatisfied with—I quote—"a thing or two". I wrote to him on 4th January asking him to let me know what these points were. I said:
…you left the matter in my hands for me to deal with. I started inquiries immediately on the specific points you put to me but they are not yet complete. If I am to do this to my own satisfaction or yours, I must know all that is in your mind. I would therefore suggest that you should tell me what the points are about which you say you remain dissatisfied so that I can see how they would best be cleared up.
I have never received a reply to that letter.
Nevertheless, on 11th January the hon. Member addressed a public meeting at Rothbury, the centre of the outbreak. Apparently he delivered himself of a string of allegations, including some new ones which he did not mention at his meeting with me. Hon. Members may be as surprised as I was at this.
I want to deal straight away with the gravest of the charges made by the hon. Member. In mid-December the hon. Member made a speech at Acklington in


which he is reported in many newspapers to have said, and I quote:
I have also been conscious of deliberate attempts to hush up the original errors by putting pressure on those whose livelihood is dependent on business provided for them by the Ministry of Agriculture and have been given to understand that they should keep quiet or face the economic consequences.
This most serious allegation quite naturally caused alarm and consternation. The House, my Department and the public at large have a right to know whether the hon. Member has or has not retracted these remarks. I challenge him to give a straight answer here and now to this simple question—does he stand by these words or does he not? Yes or no?

Viscount Lambton: I will answer. I am content that the speech made by Dr. Wilsdon was a deliberate attempt at intimidation, an attempt to hush up the matter and to bring home to people that they should make no statement whatsoever.

Mr. Peart: That is really shameful. The hon. Member does not retract, but what he has said, in view of my meeting with him, is quite remarkable. I am really surprised at the hon. Member. If he wishes to deal with individuals he should go further and repeat it outside. I would never sue the hon. Member. I believe he has a right to pursue his Parliamentary duties by pursuing inquiries. But to make charges of that kind is, I think, deplorable. He really must substantiate his charges, and he has not done so.
At his meeting with me before Christmas when he seemed inclined to stick to this allegation, he made it clear that it was based on remarks made on a private occasion by my Regional Veterinary Officer. I have had an account of what the R.V.O. said, and I accept that he should not have used the language he did, and for this I have taken appropriate measures. But by no stretch of the imagination could what he said be held to be intimidation or to justify in any way the words used by the hon. Member.
I want to deal now with the argument about diagnosis. The hon. Member's main charge under this head is that the veterinary service was negligent or in-

competent in its original diagnosis. There is not enough time to go over all the ground, and I can only highlight the key points.
The diagnosis of foot-and-mouth depends first and foremost on the clinical examination by the veterinary surgeons on the spot. All—and I repeat all—of my officers concerned agreed both on 18th and 19th July that the clinical symptoms were not those usually associated with foot-and-mouth disease. Their evidence was subjected to the closest scrutiny by my experts at headquarters. Although in agreement, they asked, even after the negative report from Pirbright, for a further examination before the restrictions were removed.
My most experienced and senior officers have since gone carefully over all the records and are of the opinion that necrotic stomatitis was present in the animals examined at Flotterton Hall on 18th and 19th July, and that this disease was still present in the animals examined there on 21st July. They have concluded that this condition probably masked the early symptoms of foot-and-mouth disease, which became evident only when it spread to cattle not affected by necrotic stomatitis.
There is a lesson to be learned from this very unusual situation. In future cases my officers will have to consider this further possibility. But there is no question of blundering or negligence. I must emphasise, too, that from the time the restrictions were withdrawn until they were reimposed on 21st July there was no movement of animals from the farm which could have contributed to spreading the disease.

Viscount Lambton: rose

Mr. Peart: I cannot deal in the time which the hon. Member has left me with the other points in the diagnosis, but I shall send him a full written statement and I shall publish it.
I deal with Mr. Brewis. This is one of the charges, although the hon. Member has not mentioned him tonight. I find the way in which he has thought fit to refer to the case of Mr. Robert Brewis particularly repugnant. I am not alone in this. Dr. Armstrong, Mr. Brewis's doctor, is reported as saying:
I am livid with anger at this man Lambton. — While propaganda to a politician


is absolute meat and drink, to me it's anathema and to Brewis it might be 'death'.
and:
I regard it as thoughtless—and indeed rather callous …
I can understand Dr. Armstrong's feelings.
Apart from the time when he was in Walkergate Isolation Hospital, Mr. Brewis was, from 21st July to 17th August, living on an infected farm, where he was subject to very strict control. He was allowed off the farm only with the permission of my officers. Foot-and-mouth virus was identified in a specimen from Mr. Brewis's hands sent to Pirbright on 31st July. Further tests, on 4th, 9th and 11th August, were all negative and we were satisfied that he was no longer a danger to animals. There was, therefore, then no need to impose a stricter control on Mr. Brewis than on other residents there.
Recently, the hon. Member is reported to have said that Mr. Brewis once again showed symptoms of the disease. I understand, however, that tests made for foot-and-mouth disease virus have proved negative and that investigations into the cause of his illness are continuing.
I am sure that hon. Members on both sides—and the hon. Member for Berwickupon-Tweed—will share my sympathy with Mr. Brewis. He has suffered much and the last thing I want to do is to add to his difficulties. I have taken my own inquiries as far as I can with my experts. But, as the circumstances of the case are rare and raise some questions of scientific interest, I propose, in conjunction with my right hon. Friend the Minister of Health, to ask scientific experts in this field to consider whether the rare occurrence of a human case of this disease presents any problems of diagnosis or necessitates any additional precautions to prevent spread of infection.
There is no time to deal with the other points which the hon. Member raised. I am making urgent inquiries into complaints about slaughtering. The hon. Member did not mention this at my meeting with him, although he managed to drag it into yesterday's debate on a rather narrow point—

Viscount Lambton: The right hon. Gentleman said that he would answer it this morning.

Mr. Peart: The hon. Member must not be too impatient. He has made

many wild statements about intimidation and threats to people's interests, which is absurd, and he knows it. On the question of Mr. Brewis, he has created difficulty and uncertainty. He has decried the veterinary service which, particularly in relation to these tests at Pirbright, has proved itself one of the outstanding services in the world. He has sought to denigrate officers who cannot answer back and has made exceptionally cheap remarks.
I am making urgent inquiries into the complaints about slaughtering. The hon. Member raised this—

Viscount Lambton: The right hon. Gentleman denied them.

Mr. Peart: I must ascertain the facts. I am not prepared to accept always what the hon. Gentleman says; in view of what he has said previously, I cannot accept his opinion. He has made so many extravagant statements that I would rather check the facts with those concerned than wait for the opinions of the hon. Member.
I am making inquiries into this. As soon as my inquiries are completed, I will certainly make a full statement. If I found that there were any abuses, I would condemn them. That is right for a Minister, and I would do this. The hon. Member has made accusations about slaughtermen. I do not know whether the hon. Member is right or not, but I am making inquiries—

Viscount Lambton: Why does not the right hon. Gentleman—

Mr. Peart: I am making inquiries. That is my job and responsibility as a Minister. I do not need to be told that by the hon. Member—

Viscount Lambton: The right hon. Gentleman does.

Mr. Peart: —and I shall make a full statement.
I want to make a general point. After an outbreak of foot-and-mouth disease, my Department always carries out a thorough review. We are always on the look-out for ways and means of improving our procedures and, of course, we are considering, and acting upon, any lessons to be learned from this outbreak. I understand that the Northumberland branch of the National Farmers' Union


has compiled a report for its headquarters. If the union has any points which it wishes to put to me, I shall, naturally, be very glad to follow them up.
The hon. Member has, of course—I have never denied this—the right to raise any points which he thinks appropriate on a matter affecting his constituency. I said that to him when he came to see me.

I am sorry that he has seen fit to discharge his duties in the way he has.

The Question having been proposed after Ten o'clock on Wednesday evening and the debate having continued for half an hour, Mr. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at twenty minutes to One o'clock.